Elon Musk announced on Tuesday that he will halt construction of the Tesla vehicle assembly plant planned for Nuevo León, in northern Mexico. The businessman explained that he will wait for the results of the US elections, which will be held on November 5, to decide whether to go ahead with the project. The billionaire’s reason for halting the investment is the intentions of Republican candidate Donald Trump to apply tariffs on cars manufactured in Mexico. “It makes no sense to invest in Mexico if that’s going to happen,” Musk said in a conference call with analysts and the media.
Construction on Tesla’s megafactory in Santa Catarina, in the metropolitan area of Monterrey, is scheduled to begin in 2026. Now its future will be tied to what happens in the White House from January onwards. “I think we have to see what happens with the election. Trump has said he will put tariffs on vehicles produced in Mexico,” Musk said.
The businessman explained that he needs to “see how things develop politically” to make a decision on the factory. “At the moment we are opposed to Giga Mexico [nombre con el que se conoce al proyecto]”, he added. Musk has been a fervent supporter of Trump. On July 13, after the attack on the Republican at a campaign rally, the Tesla owner asked for votes for him. A day earlier, the richest man in the world made a significant donation to Trump’s campaign through an action committee.
The Republican candidate has repeatedly stated that he will impose tariffs on the import of vehicles manufactured in Mexico. In line with his protectionist rhetoric, he is radically opposed to Chinese companies assembling vehicles in the Latin American country and then selling them across the border. “Something really bad is happening there in Mexico. China is building huge car plants. They are going to put the UAW out of work.” [sindicato de trabajadores del sector automotriz]”They are building them in Mexico to make cars to sell in the United States, what do we gain from this?” he said last Tuesday in an interview with BusinessWeek magazine.
In 2023, Musk bought the land in Santa Catarina where he plans to build Tesla’s electric car factory. The investment projected $4.5 billion in Mexican territory, where the idea was to assemble vehicles at a much cheaper price and then sell them in the United States. A practice known as nearshoring, which other companies have also carried out and which promises thousands of jobs for the states of northern Mexico. However, despite the stoppage that Musk announced on Tuesday, Tesla’s project has lost momentum since it was announced.
The governor of Nuevo León, Samuel García, who drives around the streets of Monterrey in a Tesla Cybertruck, a 4×4 vehicle that is one of the main bets of the American brand, was unable to obtain the tax incentives for the construction of the factory to start. Despite the wait, García has taken political advantage of the project, which he used as an example of foreign investment in his speeches when he wanted to run for president of Mexico, an intention that ultimately failed. The start of the construction of the Tesla factory has been postponed twice, first to 2024 and then to 2026. Now, according to Musk, it will be in the hands of American voters, who in November will decide whether they want as president the Republican magnate who wants the United States to manufacture its own vehicles.
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