Tesla Granted Land Use Permit for Gigafactory in Mexico Nuevo Leon State

Electric vehicle manufacturer Tesla has obtained a land use permit from Mexico's federal environment ministry to construct a "gigafactory" in the state of Nuevo Leon, as announced by the state government on Tuesday, according to Reuters.

The state government revealed that the designated area for the plant spans approximately 261 hectares. While Tesla announced its plans to establish a new factory in Mexico in March, no specific timeline for construction has been provided.

The Nuevo Leon government estimates the project's cost to exceed $5 billion, although Tesla has not disclosed the exact amount of its investment.

In October, Tesla CEO Elon Musk expressed caution regarding the construction of a factory in Mexico due to the uncertain economic situation. His remarks followed the Nuevo Leon state government's commitment of over $130 million in infrastructure investments to support the factory's development. As previously reported by Reuters, Nuevo Leon state agreed to construct electrical substations, natural gas pipelines, rail spurs, roads, as well as water and wastewater treatment facilities.

Nuevo Leon state governor Samuel Garcia stated in October that the "gigafactory" is expected to generate approximately $15 billion in revenue from Tesla and its suppliers over the next two years.

The Mexican government views the Tesla project as an example of the rising trend of "nearshoring," where an increasing number of companies are relocating their production bases from Asia closer to the United States.