Elon Musk is certainly furious right now, but the surprise announcement Musk planned to make at the Investor Day has been wrecked by the president of Mexico. The upcoming Gigafactory in Monterrey, in northern Mexico, was celebrated by President Manuel López Obrador because he couldn’t wait.
Wherever we turn, we read or hear that Tesla will make a significant announcement soon. Elon Musk apparently spoke with the president of Mexico in the morning on the phone. Yet, it didn’t take long before López Obrador officially announced that Tesla would be constructing a Gigafactory in Monterrey.
Change of Heart:
It contradicts earlier statements made by the Mexican president, who asserted that the lack of water in the state of Nuevo Leon in northern Mexico prevented Tesla from moving its manufacturing there. He made it clear to the residents that no factories that use a lot of water will be permitted in the state.
The President reportedly only needed to make one phone call this morning to change his mind. Elon Musk reportedly promised the factory will exclusively use recycled water and provided hidden assistance in resolving the water concerns, according to the President.
Although it is still too early to predict what the Gigafactory will create, there are numerous rumours. All of the Tesla electric vehicles are a possibility, but the impending Model 2 makes the most sense. The Mexico facility may be the ideal way for Tesla to keep costs as low as possible if it truly wants to sell it for less than $30,000.
Opportunities for Monterrey:
Mexico, and more specifically Monterrey, have many good reasons to celebrate. A Gigafactory will result in jobs and further development in Monterrey, which is already heavily industrialised. A new pipeline being built by the Mexican government to carry water straight from a dam 100 kilometres (60 miles) apart should prevent a repetition of last summer’s water shortage, which left local houses without water for several weeks.
With a $10 billion investment, Tesla will have a third manufacturing outside of the US in Monterrey. As Giga Texas and Monterrey are only 383 miles apart, logistics are rather straightforward. The Mexican government has previously stated that it will match any incentives given to Tesla in the US in exchange for the construction of an EV facility. The scenario appears to be mutually beneficial, and soon we will undoubtedly get more specifics.
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