A state governor in Mexico said Tesla and suppliers would invest US$15bn over the next two years in a factory near Monterrey, 200km (120 miles) from the US border.

Last March, Mexican officials said Tesla would build the new factory with an initial investment of $1bn which could rise to $5bn with component manufacturing facilities including batteries.

Now, it appears the overall investment by automaker and suppliers could triple.

According to Reuters, Tesla planned to begin production in Mexico in 2025 but the company was yet to announce a construction start date.

The new plant would help meet growing demand for EVs in the US as vehicles produced in Mexico would qualify for tax breaks and other incentives worth up to $7,500 per vehicle under the US Inflation Reduction Act (IRA).

Other automakers such as BMW, General Motors and Ford have also announced EV investments in Mexico.

GlobalData Strategic Intelligence

US Tariffs are shifting - will you react or anticipate?

Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.

By GlobalData

Mexico provides advantages such as “relatively cheap labour and free trade agreements with 50 countries”, Bloomberg noted.

Just Auto Excellence Awards - Have you nominated?

Nominations are now open for the prestigious Just Auto Excellence Awards - one of the industry's most recognised programmes celebrating innovation, leadership, and impact. This is your chance to showcase your achievements, highlight industry advancements, and gain global recognition. Don't miss the opportunity to be honoured among the best - submit your nomination today!

Nominate Now