Tesla Inc. will build a new plant in Monterrey, Mexico, the nation’s president announced, ending weeks of speculation over where the electric-car maker would choose to operate in the country.
The decision, which President Andres Manuel Lopez Obrador said the company will detail on Wednesday, would help Mexico build on the millions of combustion-engine vehicles the country already supplies to the U.S. every year. American and European manufacturers have thus far destined most of their EV factories for the U.S. market in American states, though BMW and General Motors Co. have announced new investments in Mexico in recent months that will ramp up EV exports to the U.S.
The arrival of Tesla in Mexico is also a feather in the cap for Lopez Obrador, though he didn’t get his wish for the factory to be located in an economically deprived state in the south of the country. The president said he wrung environmental commitments from Tesla Chief Executive Officer Elon Musk on a phone call Monday, including using recycled water throughout the manufacturing process — a pledge Lopez Obrador sought for a region where water has become scarce.
