A virus a thousand times thinner than a hair has sparked a more than $6,000 million project in Nuevo León state. The lockdown on supply chains between Mexico and the United States caused by the pandemic was the start for the world’s richest man, Elon Musk, to look to the country as the headquarters of his new electric car mega-factory, Tesla. The story goes back to late 2021, when the billionaire made an urgent call to Chancellor Marcelo Ebrard to ask him to reactivate the 127 Mexican factories that were supplied with his company, which were paralyzed at the time due to a health crisis. . This link was used by the federal government to get first-hand information about Musk’s ideas abroad.
From that moment, says State Department (SRE) Undersecretary for Multilateral Affairs Martha Delgado, they began working on a proposal for the Tesla company. The initiative finally became official in February 2022. “The State Department has made a personal mark, a direct accompaniment to the company, to provide legal advice and guidance in scouting. We took them to five states, the state of Mexico, Querétaro, Puebla, Hidalgo and Nuevo León. They had some criteria, some very specific conditions for the facility, and they analyzed them in each of the countries, they checked at least 50 properties,” the federal official explains.
In sync with the federal government, each of the states presented the billionaire with their units’ bonanzas and attractions to try and persuade him. In the case of Nuevo León, Governor Samuel García has announced that the first contact took place during a visit to Texas. Second, the president noted that his economic team’s previous proximity to some Tesla executives gave them direct access to send them economic and demographic information about the state’s industrial areas. Héctor Tijerina, executive director of the Invest Monterrey association, points out that last summer they helped the local government with data on the state to attract Tesla’s attention. “They wanted to know the industrial zones, the university ecosystem, the average cost of land, the average salaries for different types of positions, from operators to executives, economic data, demographics and quality of life issues,” he specified.
Tijerina, who worked for 10 years at the state’s Department of Economy, adds that Nuevo León’s geographic location is an advantage that other companies cannot match. “We’re 600 kilometers away, about six hours away between Monterrey and Texas, that’s very attractive to Tesla, that way they create a corridor where they have their entire supply chain serving both plants, their suppliers only have to have one plant in them in the area to serve both Tesla in Austin and Tesla in Monterrey,” he mentions. In addition, Nuevo León has labor peace, productivity and an ecosystem of attractive universities for the type of professional profile the company needs, and Santa Catarina is just a few kilometers from San Pedro, the municipality of the city with the highest socio-economic level and quality of life in the state .
The director of Invest Monterrey admits that although they worked together in the first phase of this process, negotiations with Tesla directors have always been led by the state government, which finally invited the billionaire to the company last October to discuss the matter inform the country, the industrial areas and the logistical facilities they offered. Regarding this visit, Governor EL PAÍS said in a previous interview that at that meeting the owner of Twitter was finally convinced that his next factory would be in the municipality of Santa Catarina. A helicopter flight over the Huasteca was enough for the millionaire to pull out his cell phone and take selfies. “Vor uns (Musk) said to his site manager, ‘I want the facility here.’ It was not foreseen to go down to the land and he made us go down, he saw it, he liked it, he liked the mountains, I saw him there very convinced, “García told EL PAÍS.
The decision had been made. After more than 14 months of federal and state work, the richest man in the world chose Santa Catarina to build a 4,000-acre, three-story factory that will produce one million cars a year. Perspectively, Secretary of State Delgado warns that the community and Mexico have won the long-awaited project that other countries have been looking for due to three factors: the network of free trade agreements that the country has, its proximity to the United States and therefore for the productive ones Musk enclaves in North American territory and finally for the quality of the work of Mexican engineers.
Details of the stimulus package are still being negotiated behind closed doors. Governor García has briefly stated that the company will make its requirements in the coming weeks and the government will accept or reject its proposal from then until a final memorandum is reached. Speaking on behalf of the federal government, Delgado has assured that Tesla hasn’t asked for any additional incentives, but that other benefits are on the table for the electric battery plant that plans to land in the country. “They don’t have any additional incentives from the federal government to what other companies in Mexico have. In fact, they weren’t looking for them. Rather, for the other plant that they want to install in the country of the batteries, we need a very intelligent system, because in the United States, the electric battery factories have huge subsidies and in Mexico we have that and the current situation is not competitive. . Here we need to use tax incentives that can make electric battery manufacturing in Mexico competitive,” he explains.
Musk has already announced his first mega investment in Santa Catarina, but the portfolio of projects being pursued by the federal government extends well beyond the first $6,000 million to be disbursed at this mega facility. The Secretary of State for Foreign Affairs specifies that the construction of an electric battery factory not only for Tesla cars but also for cars of other brands is still in the pipeline; an aerospace technology center in the Trans-Isthmic Corridor — the Isthmus of Tehuantepec Territory — and a science and technology collaboration for lithium refining in Sonora. The official states that they will continue to have meetings with the Tesla management team in the coming days to evaluate these offers. Delgado estimates that this additional portfolio would be worth around $5,000 million at best.
On the eve of Musk’s official decision to invest in Nuevo León, the project was not immune to the political turmoil marked by President López Obrador’s interest in having the millionaire explore options for the center of the country. The president threatened not to grant the permits if the project lands in Nuevo León, but the controversy was settled after a few video calls between Musk and the executive branch. After those calls, the President indicated that an agreement was reached with the company and even thanked Musk for arriving in the country.
With the ambitious goal of producing 20 million electric cars a year at profitable prices by 2030, Musk has finally chosen Nuevo León. On Tesla’s roadmap to the future, the Santa Catarina Highlands now appear on the map.
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