Tesla finally received the necessary government approval to build Gigafactory Mexico, local news platform Milenio reports, citing the official local and federal documents it obtained.
Report highlights
According to the report, Mexico’s Department of Natural Resources and Wildlife of the Management of Subdelegation for Environmental Protection and Natural Resources reached out to Tesla Mexico’s legal representative Eugenio Grandio de la Torre regarding the permits earlier this week.
It noted that Nuevo León’s Rocío Moya Gámez handed the land-use permits to De la Torre, which officially allowed Tesla to begin construction in the northern border state of Nuevo Leon. As per the state government, the Giga Mexico covers about 261 hectares (645 acres) of land.
“This morning, I am very happy because I spoke with the Secretary of the Environment, and the federal permits for Tesla have already been notified.”
Governor Samuel García Sepúlveda.
Government support
Reuters reported the Nuevo Leon government’s estimates that the construction would cost over $5 billion.
However, the Musk-led company has yet to disclose a capital cost prediction for the Giga Mexico.
In hindsight, CEO Musk stated last October that he was reluctant to go “full tilt” on its Mexican factory plans due to economic uncertainty.
“In Mexico, we’re laying the groundwork to begin construction and doing all the long lead items, but I think we want to just get a sense of what the global economy is like before we go full tilt.”
Tesla CEO Elon Musk said during the Q3 2023 Earnings Call
Notably, Nuevo Leon reportedly announced plans to allocate over $130 million to infrastructure to aid Giga Mexico’s development. It will include the construction of the following:
- electric power substation
- a natural gas pipeline
- railroad spurs
- roads
- services for water and sewage
Giga Mexico to produce Tesla’s $25K EV
Tesla aims to utilize the new Gigafactory Mexico to produce its planned low-cost electric vehicle with a base price of about $25,000.
Chief Executive Elon Musk even hinted at the new factory’s cutting-edge production line that will supposedly “blow people’s minds,” Teslarati reported.
Giga Mexico’s upcoming $25,000 EV will give Tesla a chance to enter the mass market segment, especially in its home country.
It would be crucial amid customers’ growing interest in cheaper models over luxury EVs. In return, the new Giga Mecixo is expected to bring in about $15 billion in the following two years through the company and its suppliers.
