According to Chinese media, Tesla is having some trouble with its planned Gigafactory in Mexico. This one should have been ready by the summer of next year, but some sources indicated that the factory will begin production of EVs in Q1 2025. And since the Mexican factory is supposed to kick off production of Tesla’s cheap Model 2, the latter will see a delay by extension.
The initial plan is for the Mexican Gigafactory to assemble 2 million Model 2 vehicles per year and Tesla has already convinced about 20% of its suppliers to invest in operations in Mexico. One of the key factors for the Shanghai Gigafactory’s success in China is that more than 90% of the suppliers are nearby. That’s why Tesla wants to replicate that in Mexico.
However, Mexico doesn’t have the same level of logistics, and workers in the country earn more on average than their Chinese counterparts. Also, Mexican workers require more training, which is an additional expense. Despite these hurdles, some Chinese investors believe that it’s worth it and are sticking with Tesla on this one. Additionally, Tesla had promised its partners 20% higher prices for hardware produced in Mexico.
The Shanghai factory spews about 700,000 vehicles per year and the Mexican factory doing more than 2 million cars annually is an ambitious goal, to say the least. It will be a huge factory costing €9 billion and will likely employ at least 7,000 people.