Tesla plant in Mexico later and larger than expected - electrive.com

June 29, 2023 - 12:06 pm

It has been rumored that Tesla intends to commence operations at its fresh facility in Mexico during the initial three months of 2025. This startup would occur at a later time than initially disclosed, and it would also be more extensive in size. Based on information obtained from a Chinese media report, Tesla has communicated this particular timeline to a number of Chinese suppliers.

According to the news outlet LatePost, the Tesla factory in Mexico is set to be even bigger than originally planned. Giga Mexico will have the ability to produce up to two million vehicles per year and is expected to generate approximately 7,000 employment opportunities. The overall investment for this project is valued at a staggering ten billion US dollars (equivalent to around 9.2 billion euros at present).

According to the report, numerous Chinese vendors were mentioned, revealing that Tesla has informed them that if they do not establish local production in Mexico by 2025, they may face obstacles in securing future orders from Giga Mexico and also risk losing orders from other Tesla factories. One supplier mentioned that the manufacturing expenses for the same part in Mexico are approximately 15 percent more expensive compared to China. Consequently, this would result in an increase of about 18 to 20 percent in Tesla's acquisition cost.

In March of this year, Tesla made an official announcement regarding the establishment of their factory in the Mexican state of Nuevo León. The initial reports mentioned an investment of five billion dollars and a production capacity of one million electric vehicles annually. However, the latest rumors suggest that the factory might be twice as big as initially anticipated, although this information hasn't been confirmed yet.

Initially, Tesla did not provide any information regarding the commencement of construction or manufacturing in Mexico. However, subsequently, it was revealed that the factory might become operational during the latter part of 2024. Back in March, Tesla executive Tom Zhu had shared that production in Mexico would commence either in late 2024 or early 2025, which aligns with the recent updates from China.

Tesla is currently engaged in discussions with Chinese suppliers to ensure that they will have an adequate supply of components for production commencement in approximately 18 months. It appears that Tesla's approach of sourcing over 95 percent of components locally, as seen in Giga Shanghai, might not initially be implemented in Mexico.

As per the LatePost, it seems that erecting the factory is presenting greater challenges than anticipated, resulting in a delay of its opening from 2024 to 2025. In comparison to the swift commencement of work in Giga Texas shortly after the announcement, Monterey has not seen much progress thus far. The report highlights obstacles related to logistics, as well as inadequate infrastructure and increased labor expenses. Consequently, Tesla appears to be dependent on established suppliers for the time being in this situation.

Mexico will be the initial production site for Tesla's new line of vehicles, known as the "Gen3" platform. However, this doesn't mean the Mexican facility will be the sole manufacturing plant. Once the launch takes place in Mexico, Tesla plans to utilize the same platform in its other gigafactories. Elon Musk has stated that Tesla aims to sell around five million units annually by combining the sales of both new models developed on this platform.

latepost.cn (in Chinese), driveteslacanada.ca