NEW YORK (Reuters) – Tesla has been given permission to use land by Mexico’s federal environment ministry to build a “gigafactory” in Nuevo Leon, a northern border state, the state government said on Tuesday.
About 261 hectares (645 acres) of land have been set aside for the plant, the state government said on Tuesday.
In March, the carmaker said it was going to build a new factory in Mexico, but it didn’t say when it would start.
The government of Nuevo Leon said it would cost more than $5 billion, but Tesla hasn’t said what they think the capital costs will be.
Because the economy isn’t sure, Elon Musk, CEO, said in October that he wasn’t ready to go “full tilt” on plans for a plant in Mexico.
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After he spoke, Nuevo Leon said that the government would spend more than $130 million on building facilities to help with the building process.
Reports from Reuters say that Nuevo Leon has decided to build a natural gas pipeline, railroad spurs, roads, and water and sewage services. Governor Samuel Garcia of Nuevo Leon said in October that the so-called “Gigafactory” will bring in about $15 billion in two years from Tesla and its vendors.
As a sign of the growing “nearshoring” trend, Mexico has praised the Tesla project as proof that production is moving away from Asia and toward the United States.
An official from the state told Reuters in October that Tesla could start building on the spot once they got permission from the environment ministry.
Late Tuesday night, a request for response was sent to both Tesla and a Nuevo Leon spokesperson, but neither responded right away.
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