Tesla Taiwanese supplier Hota intends to build its first US factory. Construction of the facility in New Mexico will begin in early 2024 with the goal of starting production in 2025. The location is well suited for supply to Giga Texas and Giga Mexico.
Taiwanese company Hota, which makes gears and other auto components, said it would begin building a plant in Santa Teresa, near the US border with Mexico. The company primarily produces components at its factory in Taiwan but has decided to expand to be closer to its major customers, such as Tesla. Construction of the factory should begin early next year, with mass production expected to begin in 2025.
“With three years of COVID-19 and the U.S.-China trade war changing globalization and creating regional supply chains, we restarted our thinking about going to the United States to make a deeper investment,” Chairman David Shen told a news conference in Taipei on Wednesday, according to Reuters.
Proximity to North American customers was a key factor in this decision. Customers from the region are responsible for purchasing 60% of Hota’s products. Tesla is one of the largest customers. The location in New Mexico was not chosen lightly. From here, the company will be able to quickly supply components for Tesla electric vehicles to both the Texas factory and the new factory in Mexico.
“We have the right infrastructure to meet the growing demands of Taiwanese companies, and their manufacturing expertise is very beneficial because we don’t start it from scratch,” New Mexico Governor Michelle Lujan Grisham told Reuters in an interview after the announcement. The state will provide $3 million in funding with the possibility of additional tax incentives.
James Huang, chairman of the Taiwan External Trade Development Council, said EVs would be an important focus for bilateral trade and especially in New Mexico.
“New Mexico will become a very important stronghold for the U.S. electric vehicle supply chain, so the future impact of these investments between Taiwan and the United States will be wide-ranging,” Huang said on the sidelines of a U.S.-Taiwan business forum on Tuesday.