Tesla to open factory in Mexico – report

Tesla may be preparing to build electric cars in Mexico, according to a new report out of the US – months after CEO Elon Musk criticised rival car-makers for doing the same thing.

News agency Bloomberg has reported Tesla is "finalising plans" to build a new electric-car factory in the northern Nuevo Leon region of Mexico – its third outside the US, after China (Shanghai) and Germany (Berlin).

The new factory – located in the Santa Catarina region of the city of Monterrey – would be located less than 200km from the nearest US-Mexico border crossing, and 640km from Tesla's existing factory near Austin, Texas.

Tesla CEO Elon Musk reportedly visited the region and met with government officials in October 2022 to discuss the factory.

The electric-car maker has already forged a relationship with the local government, establishing a unique fast-track customs lane at one of the region's border crossings with the US (as reported in July).

The apparent plans to build Tesla vehicles in Mexico represent a change in stance for the electric-car giant, after Mr Musk panned US rivals Ford and General Motors (GM) for building their electric cars in a country where labour costs are a fraction of those in North America and there are fewer restrictions placed on employers regarding employee rights.

Replying to a Twitter post criticising to GM's decision to build its new Blazer electric SUV in Mexico, Mr Musk said: "Teslas are the most made-in-USA vehicles".

In a September 2021 Tweet, Mr Musk criticised a positive Bloomberg article on a production milestone for Ford's Mustang Mach-E electric SUV – which is also made in Mexico – Mr Musk said:

"This is written by Ford/UAW [workers' union] lobbyists, as they make their electric car in Mexico. Not obvious how this serves American taxpayers."

But manufacturing in the region would still allow Tesla cars built there to be eligible for the US government's new electric-vehicle (EV) subsidies, with rebates of up to $US7500 for cars – and the materials in their batteries – sourced from North America.

It remains unclear which models Tesla would build at its new factory, or when it would open.

A number of key suppliers for Tesla's Texas factory are already based in the Nuevo Leon region.

Mexico is a hub for car production, with Kia building vehicles 50km from the possible Tesla factory – and Ford, General Motors, Jeep/Ram, Toyota, Volkswagen, Audi, BMW, Mercedes-Benz, Honda, Mazda and Nissan have factories elsewhere in the country.

Cars made in Mexico for Australia include the Audi Q5 and Mercedes-Benz GLB luxury SUVs, Chevrolet Silverado 1500 full-size pick-up, BMW 3 Series sedan, BMW 2 Series coupe, and Volkswagen Tiguan Allspace family SUV.

Bloomberg reports Mexico and Canada recently won a "trade dispute" with the US "over cars shipped across regional borders", which the news agency says will give car makers more incentive to build cars in the two US neighbouring countries.

Tesla is yet to confirm the report – however Bloomberg claims an announcement may be made in the coming days.