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Tesla suppliers in China are investing almost $1 billion in Mexico: report

Key Points

  • 💰 Two Chinese suppliers of Tesla, Ningbo Tuopi Group and Hesai Technology, are investing nearly $1 billion in Mexico.
  • 🏭 This investment is in preparation for Tesla’s Gigafactory in the Mexican state of Nuevo León.
  • 👷 Ningbo’s operations in Mexico are expected to create around 10,000 jobs, while Hesai’s operations will create approximately 4,000 jobs.
  • 🚗 Tesla plans to use Giga Mexico to manufacture a sub-$30,000 car, with production expected to start in the first quarter of 2025.
  • 🏗 Construction machinery for the Gigafactory has been spotted in the vicinity, indicating progress towards building the factory.
  • 🌍 This development follows Tesla’s request to Mexico for infrastructure plans, including energy, water, road, and railways, to support the Gigafactory.
  • 🌱 The Gigafactory in Nuevo León is expected to be larger than Giga Texas and the Mexico International Airport.
  • 📈 This news coincides with Tesla’s ongoing expansion and economic impact in Texas, as revealed in a separate report.

Ahead of Tesla’s plans to construct a Gigafactory in the Mexican state of Nuevo León, a new report from a government official says that two of the automaker’s Chinese suppliers are set to spend almost a billion dollars in the region.

Nuevo León Governor Samuel García Sepúlveda is visiting Tesla’s Gigafactory in Shanghai, China this week. During the trip, he said that Ningbo Tuopi Group and Hesai Technology will be spending a total of $960 million in Mexico, according to Reuters. A representative for Nuevo León said the investments would include $700 million from Ningbo Tuopu and $260 million from Hesai Tech.

“We’re very happy because everything seems to indicate that the Nuevo Leon site will be twice as big, at least, as the one in Austin,” García said during the visit.

Ningbo builds shock-absorbing products along with other automotive hardware, and Hesai produces lidar light sensors often used for robots and autonomous vehicles, according to Reuters.

García added that Ningbo is hoping to begin production by the end of this year in the state. Additionally, he says Tesla already has sourcing plans in the state for its batteries, software, computers and other necessary components, although construction has not yet begun on the factory.

According to the officials, Ningbo’s operations in Mexico are expected to create around 10,000 jobs, while it’s estimated that Hesai’s operations will create 4,000 jobs.

The companies did not respond to requests for comment.

The news comes less than a month after Tesla was awarded the necessary Environmental Impact Permits needed to begin construction on the Gigafactory. Construction machinery was recently spotted on nearby roads in August, suggesting the company would begin work on the site soon.

Earlier this month, Tesla also asked Mexico to solidify plans for infrastructure leading to the site, including basics like energy, water, road and railways. Upon completion, Tesla is expected to use Giga Mexico to build its highly anticipated sub-$30,000 car, with production beginning as soon as the first quarter of 2025.

In March, Santa Catarina Mayor Jesus Nava reported that Giga Mexico would be more than double the size of Giga Texas and twice as big as the Mexico International Airport.

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