Tesla Wants Gov to Deploy Infrastructure at Giga Mexico Site, Possible Holdup

Tesla and the Nuevo León state government are still negotiating for the latter to deploy infrastructure at the Gigafactory Mexico site, which could possibly explain the holdup in starting construction.

Tesla finally announced Gigafactory Mexico during its Investor Day in March. The automaker secured a piece of land just outside of Monterrey, Nuevo León, to build the plant.

Tesla has talked about building the factory in record time, even hoping to beat Gigafactory Shanghai’s timeline of nine months between breaking ground and production.

However, that groundbreaking has yet to come.

Last month, we got some indications from sources in the supply chain that we shouldn’t hold our breath for the project to move at the pace that Tesla first hinted at.

Now, the Nuevo León governor, Samuel Garcia, gives some more details as to what might be holding back the factory.

The governor disclosed that Tesla had asked the government to deploy “energy, water, road and rail infrastructure” at the site of the factory.

Top comment by pj Liked by 4 people

I would really like this article to put the announcement timing into context, because I don’t remember.

For instance, did tesla announce this new site at a time where they would want to sugar coat some bad news about deliveries or profit margins, or was tesla doing just fine. Since electrek follows this stuff closely, did tesla disclose these foreseeable delays in getting started (because they surely knew the plot of land they secured did not contain the necessary infrastructure)?

Context is a really important part of journalism, especially for a company like tesla who can make an overly optimistic announcement and then rely on supporters to justify lack of progress by invoking the “may be late but tesla always makes it happen” argument. It just seems insane to me that they were talking about how fast this project was going to be completed yet they were planning on building at a site with limited access to critical infrastructure in a still developing country. Also, with all the cash tesla has on hand, wouldn’t it make more sense for them to just pay to put in whatever infrastructure is needed? Surely the factory coming on line a year or two earlier would be worth more to tesla than the money saved by negotiating mexico pay for it.

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According to government officials, they are still in the early stages of the infrastructure part of the project (via Reuters):

Tesla and Nuevo Leon’s government are in the early stages of detailing investments and infrastructure needed, the state said.

The government appears to be very open to a large investment into those infrastructures, knowing that Tesla’s own investment in the factory will create a lot of jobs for the region.

Electrek’s Take

That’s not looking good. If they are still in the “early stages” of looking into the infrastructure investment, which looks to be very much needed to bring the project to production, we are years away from production.

I am open to a counterargument, but it doesn’t look good. What do you think? Let us know in the comment section below.