Tesla receives all permits for Giga Mexico, but when will construction start?

Tesla has received all the permits required for Gigafactory Mexico, nearly nine months after the project was first announced. While Tesla can now begin construction on the factory, there are still questions as to when the company will break ground in Nuevo León.’

News of Tesla acquiring all the necessary permits was revealed by the state’s economy minister Ivan Rivas. In a comment to the local publication Milenio, Rivas said Tesla has provided all the required documentation and as such has been awarded all the permits necessary to begin construction.

““Tesla is coming, Tesla is working, Tesla in some way has already started construction, just like the Government of Nuevo León; We are doing it at the same time, they already have all their federal and state permits. They provided us with everything we needed to start construction so that we could guarantee that Tesla would arrive in Nuevo Leon,” Rivas said. (translated from Spanish)

The question now becomes when construction of Giga Mexico will actually begin.

Tesla first announced Giga Mexico back in March, and as with other construction projects that company has undertaken, many were expecting a swift start to construction. Comments from executives indicated Tesla was hoping to also complete the project in less time than it took to build Giga Shanghai, but it quickly became apparent that was not going to be the case as the 4,200 acre site in northern Mexico stayed untouched.

Elon Musk shed some light on the matter at the company’s Q3 2023 earnings call earlier this month, setting some more realistic expectations for the project. When asked about Giga Mexico and its construction timeline, Musk explained that the current economic conditions, especially the high interest rates, have prompted them to adopt a more cautious approach to the project.

“We are in the initial phases of preparing for construction and addressing crucial long-lead items. However, we intend to gauge the global economic landscape before fully committing to the Mexico factory. I have concerns about the current high-interest rate environment.”

Although the call had a somewhat pessimistic tone, Musk made sure to emphasize that the factory will be built.

“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.”

Neither Musk, nor Rivas offered a timeline for when construction will actually begin. It is clear Nuevo León is eager to Tesla to break ground, and will likely begin upgrading the infrastructure to support the factory very soon, but Tesla is also clearly biding their time and are in no rush to start construction until they feel the economic conditions are conducive to doing so.

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