Tesla is building a new factory in Monterrey, Mexico [Updated]

A deal for a Tesla factory in Mexico should be announced any day, officials say, following a call between Tesla CEO Elon Musk and Mexican President Andres Manuel Lopez Obrador.

Update: The Mexican president has now confirmed that Tesla will build a factory in Monterrey, with details likely to come tomorrow.

Rumors have been swirling for months that Tesla is getting closer to announcing a gigafactory plan in Mexico.

Last year, when Tesla CEO Elon Musk discussed Tesla’s next plant in North America, we confirmed that Tesla was considering sites for a new factory in Canada, Mexico and the United States.

In October, Musk visited the state and met with the governor, sparking rumors of a Tesla factory in Mexico. Local media have reported that Tesla is particularly interested in a location in Santa Catarina, a municipality just outside of Monterrey in Nuevo Leon.

Following the visit, the government confirmed discussions on potential investment in the state.

In December, a deal to bring a Tesla factory to Mexico was reached with an announcement expected within a month. By the end of the month, government officials said an announcement from Tesla was imminent, but two months later, it still hasn’t come.

Things have gotten more complicated lately, with Mexico’s president, Andres Manuel Lopez Obrador, personally involved in the negotiations. He said he was hesitant to allow Tesla to build a factory in his opposition-controlled state of Nuevo Leon because of “water supply concerns.”

Instead, he urged Tesla to build a factory in Mexico City in a new commercial center next to a new airport, which he has been promoting.

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The parties are now close to an agreement following two phone calls between López Obrador and Elon Musk over the past few days.

Mexican officials confirmed the two spoke for 35 minutes on Saturday and 40 minutes on Monday, Reuters reported. Government officials say the deal is close and could be announced as soon as today.

The new rumor comes just ahead of Tesla’s investor day tomorrow, when Tesla is expected to explain that it plans to increase electric vehicle production to 20 million vehicles a year by the end of the decade.

The automaker has indicated that it will need to build eight new gigafactories to achieve this goal. Hence, more seats are expected to be announced relatively soon.

Update: President López Obrador has confirmed that Tesla will build a factory in Monterrey, Nuevo Leon. Details are expected later this week — most likely at Tesla’s investor day tomorrow.

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