Mexico offers Tesla something they don’t get in the US

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With the confirmation of the investment project in Nuevo León, Elon Musk’s firm will export without tariffs to the EU or Japan, highlights an expert

With the confirmation of a Tesla plant in Nuevo León, with an estimated investment of 5 billion dollars, Elon Musk’s company will have advantages to export from Mexico, without paying tariffs, to markets in Europe and Asia.

By establishing in national territory, Tesla will be able to send vehicles to more than 40 countries without tariffs, due to the number of trade agreements that Mexico has, unlike the United States, said Manuel Montoya, director of the Nuevo León Automotive Cluster (CLAUT).

“They can export to Europe, Japan, Central and South America, and the Middle East with a free trade agreement,” he mentioned.

In addition, Montoya equated Tesla’s investment to the arrival of General Motors and Ford in the country, due to the investments that triggered.

“It will generate a lot of employment and business for local Mexican businessmen, because with the new USMCA rules, vehicles must have regional content and this company has to buy 75% [of components] in North America,” he explained.

Regarding the support that the government of Nuevo León offered to Elon Musk’s company, Montoya said that, without knowing the details, it was the ecosystem that the state already has installed that attracted the assembly company, not so much the land or tax incentives.

“In addition to suppliers, Nuevo León has infrastructure, trained personnel, and good universities. And from here you can synergize with the plants in Austin, Texas,” he explained.

In addition, he recalled that there are more than 100 Tesla suppliers in the country, several located in Nuevo León, such as Quanta Computer, Noah Itech, Brembo, AGP, ZG Group and Vertiv. In fact, Tesla suppliers have an exclusive lane at the Colombia-Solidaridad border crossing into the United States.

In a morning press conference, President Andrés Manuel López Obrador announced that the Tesla auto plant will be installed in Nuevo León, after having spoken with the owner of the company, billionaire Elon Musk, and after last week he threatened with not giving the permits for it to be installed in that state due to the lack of water.

He said Tesla has committed to several measures to address the problem, such as using recycled water.

He pointed out that today, Wednesday, the directors of the company will make the announcement, to which the governor of Nuevo León, Samuel García (MC), will be invited, but he announced that he will not participate.

“The plant is going to be established in Monterrey with a series of commitments to face the problem of water shortage. They are going to help in this sense,” he reported.

“There is a first commitment, which is in the entire manufacturing process of electric cars, with the use of recycled water and water treatment, even for painting”, said the President.

According to sources from the Ministry of Foreign Relations (SRE), Tesla will invest almost 5 billion dollars in its plant in Nuevo León.

Rule out subsidies

López Obrador ruled out that his government is going to grant subsidies for the production of batteries and semiconductors for electric cars as the United States government does, something that he said Musk understood.

“He understood it perfectly and we talked about the fact that without these subsidies, Mexico’s comparative advantages are unique in the world,” he added.

Meanwhile, the governor of Nuevo León, Samuel García Sepúlveda, affirmed that the plant that Tesla will install in the municipality of Santa Catarina will be the largest in the world for the company.

He added that he will travel to Austin, Texas, today to attend the investor day of Elon Musk’s firm, where it is expected that there will be a rendering of what the plant in Santa Catarina would look like.

Source: El Universal

Monterrey Daily Post