Tesla builds a new factory in Monterrey, Mexico [Updated]

After 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.

to update: The Mexican president has now confirmed that Tesla will build a factory in Monterrey with details likely to come tomorrow.

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

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

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

Following the visit, the government confirmed that discussions were taking place regarding a possible investment in the state.

In December, a deal was struck to bring Tesla’s factory to Mexico with an announcement expected within the month. By the end of the month, government officials claimed an announcement from Tesla was imminent, but two months later, it still hasn’t come.

Things got more complicated recently when Andrés Manuel López Obrador, the President of Mexico, was personally involved in the negotiations. He said he would be reticent about allowing Tesla to build a factory in Nuevo León, the state controlled by his opposition, due to “concern about water supplies”.

Instead, he was pushing for Tesla to build a factory visible to Mexico City in a new business center he was promoting next to a new airport.

And now the two parties are close to reaching an agreement after two phone calls between Lopez Obrador and Elon Musk over the past few days.

Reuters reported that Mexican officials confirmed the pair spoke for 35 minutes on Saturday and 40 minutes on Monday. Government officials suggest that the deal is very close and could be announced as soon as today.

The new rumors come ahead of tomorrow’s Tesla Investor Day, during which Tesla is expected to explain how it plans to increase electric vehicle production to 20 million vehicles per year by the end of the decade.

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

to update: President López Obrador has now confirmed that Tesla will build the factory in Monterrey, Nuevo León. Details are expected later this week – most likely tomorrow at Tesla Investor Day.