Mexican President Andres Manuel Lopez Obrador had a call with Tesla CEO Elon Musk last month about a new Tesla factory in Mexico. Now, it seems that the factory will become a reality as AMLO announced that the electric car company will build a plant in northern Mexico.

A presentation about this new Mexican plant will be shared in a presentation to investors on Wednesday. AMLO stated that Tesla CEO Elon Musk assured him that the company would commit to any worry that Mexico has over the plant.

According to the BBC, the deal comes amid heightened tensions between the United States and China that have caused much disruption to the supply chain. Mexico has come out as a winner as this would mean that the U.S. would have easier access to goods usually made in China.

The North American country could come out as a potential alternative to China, and this is seen as a boost to the job and economic opportunities in Mexico.

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According to CNBC, this new plant will be built in Monterrey, which is currently hit by a severe drought, resulting in a big water shortage around the city. However, Musk assured AMLO that it will be adhering to a series of commitments to address water scarcity.

The president confirmed that Tesla has agreed to use recycled water at the plant throughout the entire vehicle manufacturing process. This includes the paint used in the cars.

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However, AMLO also stated that Tesla will be revealing more information about how it will be pulling this off during its Investor Day event on Wednesday.

The Mexican president and the Tesla CEO spoke at length first on Friday and resumed their conversation on Monday. AMLO says that Musk was very responsive and understanding about the proposals the Mexican government was giving.

The president also said this new plant is a considerable investment and will result in "many, many jobs" being created in Monterrey, which is an industrial city near the U.S.-Mexico border. The city had long been considered a frontrunner for investment from Tesla, which also has car plants in other parts of the world, including Germany and China.

How Much Is the Tesla Mexico Deal Worth?

President Andres Manuel Lopez Obrador has stated that this new Tesla plant in Monterrey is a "very big" automotive plant. However, he did not reveal which Tesla models will be manufactured there.

A Mexican official called this a Tesla "gigafactory" that could produce the Semi truck, Roadster sports car, and potentially other vehicles. However, another official noted that this plant could produce sport utility vehicles (SUVs). This begs the question; how much is the deal worth?

According to Reuters, Martha Delgado, a Mexican deputy foreign minister, revealed that the deal is worth over $5 billion. This was all part of the company's plans to broaden its operations outside the United States.

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This article is owned by Latin Post.

Written by: Rick Martin

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