Tesla’s plans to build a new Gigafactory in Mexico, have been suspended once again. Elon Musk, the company’s CEO, announced that he will wait for the results of the U.S. presidential elections in November before deciding on the continuation of the project.
According to Musk, investing in Mexico is currently risky due to the threats from Donald Trump, the Republican candidate, to impose high tariffs on vehicles produced in the country.
“Trump has said he will impose heavy tariffs on vehicles produced in Mexico. So, it doesn’t make sense to invest heavily in Mexico if that’s going to be the case. We need to see how things develop politically,” Musk said during a conference call with analysts, according to Bloomberg.
Tesla in Mexico and the Donald Trump Factor
During a rally in Vandalia, Ohio, last March, Donald Trump promised to impose a 100% tariff on vehicles crossing the border from Mexico.
With this measure, the Republican candidate aims to protect the U.S. automotive industry from foreign competition. In particular, Trump has argued about Chinese cars being manufactured in Mexico.
“China is now building a couple of huge plants where they can manufacture cars in Mexico, and they think they’re going to sell those cars to the United States without border taxes,” said the former president, who aspires to return to the White House.
Strategically, with these statements, the Republican candidate seeks the support of auto workers in the Rust Belt or manufacturing belt of the Northeast and Midwest of the United States, which crosses Ohio, the city where J.D. Vance, his running mate for vice president, is from.
Elon Musk, a Declared Trump Supporter?
Although these tariff threats could go against Tesla’s interests, at least concerning the Gigafactory in Nuevo León, Elon Musk is noted as a supporter of Donald Trump’s cause.
After an assassination attempt against the Republican candidate, the businessman expressed his support with a tweet. Some media claimed that Musk had promised a million-dollar monthly donation to Trump’s campaign. However, the magnate denied this a few days later.
What Did Presidente of Mexico Say?
The President of Mexico, Andrés Manuel López Obrador, spoke about Elon Musk’s decision to suspend the plans for the Gigafactory in Nuevo León. During his morning conference, AMLO suggested that Musk’s announcement could be a maneuver to speculate in the financial markets.
“They make that decision, arguing that since President Trump said that cars produced in Mexico would not be sold in the United States, they want to wait until the U.S. election is over to see if this does not affect them if President Trump wins,” he said.
AMLO described Trump’s statements as part of campaign rhetoric and that financial speculation does not contribute to real progress.
“This statement from President Trump is made in the context, as we have always said here, of the campaign, and in campaigns, there is a lot of passion, a lot of rhetoric, a lot is said, but not only in the United States but in any country with elections.”
“Once the elections are over and the governments are constituted, it is a different matter,” he noted.
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And Samuel García?
Tesla’s arrival in Nuevo León is the biggest achievement of Samuel García as governor of the state. During the election campaign, the candidate from Movimiento Ciudadano, Jorge Álvarez Máynez, insisted that Samuel García had achieved the largest nearshoring investment in Mexico in recent years. (A fact that needs to be noted is false, as the largest investment was made by Amazon in Querétaro, exceeding 5 billion dollars).
Musk’s statements came while Samuel García was outside of Mexico with his wife Mariana Rodríguez Cantú and their daughter Mariel. However, the governor was already aware of the magnate’s announcement.
Columnist Mario Maldonado wrote the following about it in his text published in El Universal: “Samuel García knew the news a few days ago; Tesla officials informed him in advance of the announcement Elon Musk made with his investors yesterday.”
“However, Tesla’s investment in Pesquería, Nuevo León, had been stalled for several months, and everything indicated it would be canceled: not a single stone was laid, no workers were hired for the eventual plant, and in his most recent book, Elon Musk warned that he would not send his engineers to Mexico.”
Meanwhile, an investment of 4.5 billion dollars and the creation of 35,000 jobs, both direct and indirect, are in the air.
