Tesla has been granted 2.63 billion pesos (approximately $153 million USD) in incentives by the Mexican state of Nuevo Leon for the construction of its latest major factory. This move by state officials aims to address local concerns about delays in the development of the electric vehicle maker’s plant.
The incentives, sanctioned by Nuevo Leon’s economic development council, encompass the establishment of essential infrastructure, including roads and water treatment facilities, reports Bloomberg. Additionally, Tesla will benefit from a reduction in payroll tax, as detailed in a statement released by the Nuevo Leon government on Thursday.
Earlier this year, Tesla CEO Elon Musk requested improvements in electricity, water, and transportation infrastructure in the region as prerequisites for commencing construction. The state agreed to these terms, yet the factory’s progress has been hindered by delays.
In October, Musk expressed reluctance to proceed “full tilt” with the facility, citing high interest rates as a concern. Furthermore, in a recent interview, Musk revealed that Tesla’s next-generation entry-level vehicle would initially be produced in its Texas factory, as the Mexican facility would not be ready in time.
The approval of these incentives follows the green light given by Mexico’s environmental regulator, which granted Tesla a land use permit earlier this week. However, Tesla still requires a series of local and federal permits, including those from the Energy Regulatory Commission, to construct and operate the Nuevo Leon factory.
Giga Mexico will build cars with Tesla’s next-gen platform. Tesla will start its next-gen platform at Giga Texas instead of Giga Mexico, as the latter is taking longer than expected to build.
Tesla plans to invest around $10 billion in the factory over several phases, with an initial investment of $4.5 billion, as stated by the Nuevo Leon government. The exact start of construction at Giga Mexico has not been determined.