Elon Musk has cautioned that Tesla is in no rush to build Giga Mexico, saying during the Q3 2023 earnings call that there are other factors at play that have delayed the start of the project.
Tesla announced plans to build Giga Mexico in March, and based on initial comments from executives and government officials in Nuevo Leon, it looked like Tesla was hoping to build the new Gigafactory in less time than it took to build Giga Shanghai, which went from mud pit to an operating factory in under a year. However in the months since that announcement, there has been no construction activity at the 4,200 acre site.
Tesla hasn’t been resting on its laurels, having already obtained the required environmental impact permits, and requesting the government to install the necessary infrastructure that will support the factory.
When asked about Giga Mexico and the potential timeline for construction on the Q3 earnings call yesterday, Senior Vice President of Automotive Tom Zhu was hesitant to reveal much, only saying that they were “working on infrastructure and factory design in parallel with the engineering development of the new production that will be there,” ending with, “that’s all I can share from that.”
However CEO Elon Musk provided more clarity on the situation, saying the current economic environment, specifically high interest rates, has made them take more a cautious approach to the factory.
“We’re laying the groundwork to begin construction and doing all the long lead items, but I think we want to just get a sense for the global economy is like before we go full-tilt on the Mexico factory. I am worried about the high interest rate environment that we’re in.”
Despite the tone, later in the call Musk made sure to emphasize that the factory will be built, but that it’s just a matter of when.
“We’re definitely making the factory in Mexico. We feel very good about that. We put a lot of effort into looking at different locations, and we feel very good about that location, and we are going to build a factory there, and it’s going to be great. The question is really just one of timing.”
Musk went on to say that Tesla will start the initial phase of construction next year, putting the project about a year behind its initial schedule. This does not however mean that the next-generation platform will be delayed. Initially Giga Mexico was planned to be the first factory to build the next-gen platform, but those plans have now switched to Giga Texas, where executives can keep a closer eye on the progress of the project.