Tesla hold investments in the Mexico plant till after the US election

“Trump has said that he’ll put heavy tariffs on vehicles produced in Mexico,” he told Tesla investors and analysts during the earnings call following the presentation of the Q2 financial report. “So it doesn’t make sense to invest a lot in Mexico if that is going to be the case. We kind of need to see where things play out politically.” 

But let’s be honest – it doesn’t seem as though Musk has been in a hurry to finish the Mexican factory, which will be based in the Mexican state of Nuevo León. In February 2024, there were reports that the start of construction was imminent. That is already a year after it was announced, and Tesla has had all the necessary authorisations since autumn last year.

The planned investment in the factory is said to be around five billion dollars, while the production capacity would be up to one million electric cars per year.

Waiting to kick off construction could be a problem. In September 2023, Tesla received the first environmental permits for the plant. However, these are based on the condition that the manufacturer has 26 months to prepare the site and start building the factory. So far, there have been no reports that construction has actually begun.

“We’re currently on pause on Giga Mexico,” Musk said during the call. “I think we need to see just where things stand after the election.”

It is not clear which models Tesla was or is planning to build in Mexico. Either way, there have been reports that production would not kick off until 2026 or 2027. Initial reports suggested the first cars would come off the production line there in Q1/2025. Nonetheless, Musk did say that the carmaker is accounting for the pause in construction (or the preparation thereof) by increasing the capacity at other factories.

“However, we are increasing capacity at our existing factories quite significantly, and I should say that the Robotaxi will get produced here at our headquarters at Giga Texas, as will Optimus towards the end of next year for Optimus production version two — the high-volume version of Optimus will also be produced here in Texas,” he added.

This comes even though Musk endorsed Trump earlier this month. There were even rumours that he could donate up to 45 million dollars per month to Trump’s campaign. However, Musk denied these rumours and said he has donated to the America PAC, a political organization to which donors can give unlimited amounts of money. Whether that money benefits Trump won’t be known until the PAC (Political Action Committee) files with the Federal Election Commission in October.

bnnbloomberg.ca, foxbusiness.com (investments), theguardian.com