BTN News: Elon Musk has paused building Tesla’s new car factory in Nuevo León, northern Mexico. He said he will wait for the US election results on November 5 to decide what to do next. Musk’s choice is based on the plans of Republican candidate Donald Trump, who wants to put tariffs on cars made in Mexico. “It doesn’t make sense to invest in Mexico if that happens,” Musk said in a call with analysts and the media.
Background and Future Plans for Tesla’s Factory in Mexico
Tesla planned to start building its megafactory in Santa Catarina, near Monterrey, in 2026. But now, the project’s future depends on the upcoming presidential election. “We need to see what happens with the election. Trump has said he will impose tariffs on vehicles produced in Mexico,” Musk explained.
Political Considerations and Musk’s Decision
Musk said he needs to “see how things develop politically” before making a final decision about the factory. “At this moment, we are opposed to Giga Mexico,” he added. Musk has strongly supported Trump. On July 13, after an attack on Trump during a campaign rally, Musk urged people to vote for him. The day before, Musk donated a large amount of money to Trump’s campaign through an action committee.
Trump’s Trade Policy and Its Impact on the Automotive Industry
Trump has often talked about putting tariffs on cars imported from Mexico. He does not like that Chinese companies make cars in Mexico to sell them in the US. “Something really bad is happening in Mexico. China is building huge car plants there, which will take jobs from US car workers. They are making these plants in Mexico to make cars for the US market. What do we gain from this?” Trump said last week in an interview with BusinessWeek.
Investment and Economic Impact of Tesla’s Project in Mexico
In 2023, Musk bought land in Santa Catarina to build the Tesla factory. He planned to invest $4.5 billion. The plan was to make cars cheaper in Mexico and sell them in the US. This practice is called nearshoring. Other companies are also doing it, and it promises many jobs in northern Mexico. But despite Musk’s announcement of the pause, the Tesla project has lost momentum since it was first announced.
Local Political Reactions to Tesla’s Factory in Nuevo León
Samuel García, the governor of Nuevo León, often seen driving a Tesla Cybertruck, could not get the tax incentives needed to start building the factory. Despite the delay, García used the project to gain political support. He talked about it as an example of foreign investment in his speeches during his presidential campaign, which did not succeed. The start of Tesla’s factory construction has been postponed twice, first to 2024 and then to 2026. According to Musk, its future now depends on American voters in November. They will decide if they want a president who wants cars to be made in the US.
Conclusion: The Influence of Politics on Tesla’s Investment Decisions
Elon Musk’s choice to pause the construction of Tesla’s factory in Mexico shows how much political events can affect business plans. As the US election gets closer, the car industry and investors are watching closely. The election result will decide the future of Tesla’s investment in Mexico and shape trade and manufacturing in North America.
