By CNBC
Mexico’s President Andrés Manuel López Obrador said Tuesday that electric car company Tesla has committed to building a plant in the city of Monterrey, an industrial hub in northern Mexico.
López Obrador said the promise came in phone calls he had Friday and Monday with Tesla head Elon Musk.
López Obrador had previously ruled out placing such a plant in the arid northern state of Nuevo Leon, where Monterrey is the capital, because he didn’t want any water-hungry factories in a region that has suffered severe water shortages.
But he said Musk’s company had offered several commitment to address those concerns, including using recycled water.
“There is one commitment that all the water used in the manufacture of electric automobiles will be recycled water,” López Obrador said.
López Obrador did not specify the size of the investment or what the plant would produce, noting that the company planned to release more details on Wednesday.
But he said “this is going to mean a considerable investment and many, many jobs.”
Tesla already has two plants outside the United States, one in Shanghai and another near Berlin.
Monterrey is highly industrialized and close to the U.S. border, and had long been considered the frontrunner for any Tesla investment.
But the city suffered such severe water shortages in 2022 that many homes went weeks with intermittent or no water supply in 2022. The government is building a 60-mile (100 kilometer) pipeline to bring more water in from a dam to increase the supply.
