Tesla plans to establish new factory in Mexico to expand its presence

Tesla, the prominent American electric carmaker, has reportedly planned to open up a new factory in Mexico, following other automakers in building their presence in the south of the U.S. border.
Mexico's President, Andres Manuel Lopez Obrador, claimed that the electric car company's facility would be situated in Monterrey, approximately a three-hour trip from Texas.
Sources also confirm that Tesla is likely to reveal more insights during its investor presentation on Wednesday.
Mexico had previously voiced concerns regarding the regional impacts of the facility's water requirements.
However, Lopez Obrador asserted that Elon Musk, the CEO of Tesla, had provided assurances that allayed his doubts.
Mexico is trying to position itself as a leader while the U.S.-China tensions threaten existing supply routes.
U.S. President Biden has underlined the need for made-in-America rules, specifically for cars in order to qualify for the additional subsidies contained in a significant spending plan agreed upon last year to combat climate change.
But the regulations make an exception for Mexico and Canada, whose contribution to the auto industry has increased as American companies are going to other countries for cost-saving measures.
Tesla has constructed facilities in Germany and China, making this the company's third factory outside of the United States.
According to sources, the new Tesla factory required an initial investment of $1 billion, which might increase to $10 billion over time.
Mexican Deputy Foreign Minister, Martha Delgado stated that the financing was more than $5 billion and the proposed facility would produce roughly one million automobiles per year.
Another anonymous Mexican source claimed the facility would be a Tesla gigafactory, producing cars such as the company's truck and sports car.
The corporation did not shed light on its new expansion.
Tesla, like other automakers, believes that the market for electric cars will expand quickly as consumers switch to more environmentally friendly modes of transportation over the upcoming years.
Only a few weeks ago, BMW announced that it will be investing in a facility in Mexico. Tesla has also now confirmed its plans. In addition, Ford also makes its electric SUV in the country.
Source credit: https://www.bbc.com/news/business-64803467