Tesla and Mexico to announce a deal for a factory, says official

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

For months now, there have been rumors that Tesla is getting close to announcing a Gigafactory project in Mexico.

Last year, we reported on Tesla’s CEO Elon Musk confirming that Tesla is considering sites for a new factory in Canada, Mexico, and the United States when discussing Tesla’s next plant in North America.

In October, rumors of a Tesla factory in Mexico ramped up as Musk visited the state and met with the governor. Local media reported that Tesla was particularly interested in a location in Santa Catarina, a municipality just outside of Monterrey in Nuevo León.

Following the visit, the government confirmed discussions of a possible investment in the state.

In December, a deal to bring a Tesla factory to Mexico was reportedly achieved with an announcement expected within the month. By the end of the month, government officials claimed that an announcement from Tesla was imminent, but two months later, it has yet to come.

Things got more complicated recently as Andres Manuel Lopez Obrador, Mexico’s president, got personally involved in the negotiations. He said that he would be reticent in permitting Tesla to build a factory in Nuevo León, a state controlled by his opposition, due to “water supply concern.”

Instead, he has been pushing for Tesla to build a factory clear to Mexico City in a new business hub that he has been promoting next to a new airport.

Now the parties are closer to an agreement following two phone calls between Lopez Obrador and Elon Musk over the last few days.

Reuters reports that Mexican officials confirmed the pair talked for 35 minutes on Saturday and 40 minutes on Monday. Government officials are suggesting that a deal is extremely close and could be announced as soon as today.

The new rumor comes just ahead of Tesla’s Investor Day to be held tomorrow and during which Tesla is expected to explain how it plans to ramp up electric vehicle production to 20 million vehicles per year by the end of the decade.

The automaker has indicated that it is going to need to build eight new Gigafactories in order to achieve this goal. Therefore, more locations are expected to be announced relatively soon.