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TESLA: Mexican States Compete Over Possible Tesla Plants

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TESLA: Mexican States Compete Over Possible Tesla Plants

(CTN NEWS) – MEXICO CITY – States in Mexico are competing with one another for the possibility of a Tesla factory. Similar jostling takes place in the US as states and towns vie for funding from digital companies.

Mexican governors have gone to absurd measures to promote their states, like erecting billboards, establishing exclusive roads, and making mock-ups of Tesla advertisements.

Also, there is no assurance that Tesla will construct a whole factory. Nothing has been declared, and the only thing that has Mexican officials excited is their assurance that Tesla CEO Elon Musk will soon communicate with Mexican President Andrés Manuel López Obrador.

A northern industrial state called Nuevo Leon appeared to be in the lead at the start of the race.

It painted the Tesla emblem on a lane at the Colombian-Texas border crossing last summer and put up “Welcome Tesla” billboards in Monterrey, the state capital, in December.

Even the famous wife of the state governor, Mariana Rodriguez, might be seen with Musk in leaked pictures.

López Obrador asserted on Monday that he would not permit enterprises’ usual high water use to run the danger of creating shortages in the semi-arid state.



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Similar to piranha tank feeding time, this prompted a feeding frenzy across other Mexican states. The governors’ recommendations ranged from being shrewd to almost amusing.

Cuitláhuac Garcia, the governor of Veracruz, made a joke about how his state was the only one with an abundance of gas before immediately adding, “Gas… for industrial use, for industrial use!”

Due to the fact that Veracruz is home to Mexico’s sole nuclear power plant, Garcia, who joined the race late, had to put in more effort.

He also asserted that Veracruz possessed 30% of Mexico’s water supply, despite the fact that the National Water Commission calculates the state’s share to be closer to 11%. As it turns out, water is denser than blood.

There would also be the westernmost state of Mexico’s governor, Michoacan. The tagline “Michoacan — The Best Option for Tesla” was instantly tweeted by Gov. Alfredo Ramrez Bedolla alongside to a gigantic, car-sized avocado, Michoacan’s most recognizable product.

Ramrez Bedolla declared on television, in between talks with leaders in the car industry and foreign business officials, “We have adequate water.”



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Violence caused by drug cartels is also a problem in Michoacan. Yet, seven significant foreign automakers have chosen to open operations there despite comparable violence in the nearby Guanajuato state.

Nuevo Leon’s governor. In order to prevent being completely cut off, Samuel Garca had to act quickly and come up with a creative plan.

Enrique Alfaro, the governor of Jalisco and a member of the same tiny Citizen’s Movement party, was approached by Garcia.

Together, the two created an “association” on Thursday that would give Jalisco trucks priority entry to the border crossing in Nuevo Leon, the same one where a “Tesla” lane made its debut last year.

In addition to having a flourishing foreign technology sector, Jalisco has more water than Nuevo Leon.

They appeared to be making an effort to be cordial. “We are states that are not obliged to compete or eat each other up… Alfaro thinks that fragmentation for development is a bad concept.

Gabriela Siller, head economist at Banco Base in Nuevo Leon, claims that López Obrador’s attention to water may be more motivated by politics than by droughts.



She alleged that the president tried to influence Tesla’s investment to move to a state controlled by his Morena parties, like Michoacan or Veracruz. Siller thinks that may be a risky game.

Tesla might elect not to travel to Mexico and declare that it is not someone’s toy to be moved anywhere, she said.

Pitting one state against another is a typical practice, according to Sam Abuelsamid, a lead research analyst at Guidehouse Insights in the United States.

It seemed like every state and community in the US was putting in bids to tempt Amazon there a few years ago, when Amazon talked about expanding their headquarters, Abuelsamid said.

Some people question if Musk will unveil anything related to an auto assembly plant. It won’t be a facility, but rather a “ecology” of suppliers, according to Foreign Affairs Secretary Marcelo Ebrard.

Previous promises made by Musk have either not materialized or have done so decades later. For instance, he stated in 2019 that by 2020, a fleet of completely autonomous robot axis would be on the roads.

Over three years later, Tesla has still not sold a single autonomous vehicle.



Musk has mentioned producing an electric car for $25,000 that would be roughly $20,000 less expensive

Although there hasn’t been much discussion of subsidies in Mexico so far, numerous automakers have benefited from large financial incentives to set up factories there. A race like that may be pricey.

It’s questionable, according to Abuelsamid, “if providing those subsidies is actually that economically beneficial to municipalities.” To attract a corporation to move there, “they’ll occasionally spend billions of dollars in tax benefits.”

Musk has proposed producing an electric car for $25,000, which would be roughly $20,000 less expensive than Tesla’s current Model 3, the company’s most entry-level model.

To save money on labor costs and maintain profit margins, several automakers produce lower-cost models in Mexico.

A Tesla investment might be a part of a US business trend known as “nearshoring,” where firms that once produced in China but are now worried about logistical and political problems there.

The fact that these businesses would now look to Mexico provides the biggest chance for foreign investment for the Latin American nation.

It will be difficult and challenging for nations to compete for investments from this nearshoring phenomenon, according to Alfaro.

Wherever Tesla opens a location, according to Ramrez Bedolla, “it will be significant news in Mexico.”


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Alishba Waris is an independent journalist working for CTN News. She brings a wealth of experience and a keen eye for detail to her reporting. With a knack for uncovering the truth, Waris isn't afraid to ask tough questions and hold those in power accountable. Her writing is clear, concise, and cuts through the noise, delivering the facts readers need to stay informed. Waris's dedication to ethical journalism shines through in her hard-hitting yet fair coverage of important issues.

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