waiting for details and fine print

How much will Tesla invest in Nuevo León? How many jobs will it create? What are Elon Musk’s plans for his gigafactory in Mexico? What did the Government of Nuevo León offer to surpass other competitors, including Ontario, in Canada? .

The unknowns will begin to clear up, perhaps, this week when the official announcement is made. What we have, so far, are transcended. It is known that Tesla was looking for a site for its fifth automobile manufacturing plant in the world and that this industrial facility will require a gigantic investment. Initially, this will exceed 1,000 million dollars, but it could reach up to 10,000 million dollars in the coming years.

In principle, this is great news for Nuevo León and for Mexico. The first major investment dedicated 100% to the production of electric cars, in a country that is a manufacturing and exporting power in internal combustion vehicles.

If it comes to fruition, Mexico will be on the map of the automotive industry of the future and will associate our country brand with one of the most valuable brands in the world.

Tesla has a capitalization value of $470 billion and 99,000 employees worldwide. The celebrations seem justified and everything indicates that it is a shared achievement of the Government of Nuevo León and the Foreign Ministry. In the competition to capture this investment, they “beat” Canada, South Korea and some cities in the United States.

The celebrations must leave a space for caution and careful reading of the terms in which the investment will take place. We must not lose sight of the fact that Tesla CEO Elon Musk is a self-promotion magician and that one of his talents consists of negotiating very generous conditions for his projects. Knowing what Nuevo León put on the table to get the investment is very important. Let us remember that the capture of the Kia plant in Pesquería, during Rodrigo Medina’s six-year term, generated a small/big scandal, among other things due to the granting of incentives that were not transparent.

How many jobs and how much economic benefit will this Tesla investment generate? In this promotional skill from Musk, the project, Tesla’s fifth car factory, is talked about as a gigafactory. The use of this neologism implies something exceptional and perhaps it is, but more details remain to be known. Are we talking about something that will be bigger than VW in Puebla, Ford in Hermosillo or Nissan in Aguascalientes? Maybe not, but here we have the Musk factor. His ability to turn a corporate decision into something akin to a TV show, with glamor and free publicity included. New investments are welcome, but we must not lose sight of the fact that Mexico is not an industrial desert. It has a map of large automotive investments, consolidated over more than nine decades and reinforced after the entry into force of NAFTA. There are close to 1 million jobs linked to this industry, a dozen states that have automobile or auto parts factories as the locomotive of their economy.

What can we expect from this great Elon Musk project in Mexico? The announcement will take place in a context loaded with information and news. In favor, he has the decision of the Government of the United States to promote the vehicular transition towards electric mobility and the inclusion of Mexico within the map of the regions that can receive part of the multi-million dollar stimuli from the Government.

Against it, we have the accumulation of doubts that have been generated about Musk’s management style, as a result of the purchase of Twitter. A year ago he was considered a genius, a kind of King Midas of Silicon Valley. In 2022, his company has lost more than 60% of market value, almost 700,000 million dollars and some key investors are questioning if Musk is Doctor Jekill or Mister Hyde, the CEO that Tesla needs to face growing competition and a macro environment. of high interest rates and meager economic growth.

Hopefully in this project the good things of Musk, Tesla and the automotive industry predominate. It would be great for Mexico and for Nuevo León. Time will tell and it will help to clear up the unknowns.

lmgonzalez@eleconomista.com.mx