Tesla will build its next Gigafactory in the Mexican state of Nuevo Leon. This news was revealed by Mexican President Andres Manuel Lopez Obrador yesterday and confirmed by Tesla today. This will be Tesla's sixth Gigafactory. 

Tesla Gigafactory in Mexico

Tesla is going to try to recreate its success with Gigafacotry Shanghai and Gigafacotry Texas to bring production relatively quickly, as they enter a new location to produce their own vehicles.

During Tesla's Investor Day, Chief Executive Officer Elon Musk confirmed the news of building its next Gigafactory in Mexico, claiming it as the most significant announcement of the day. Reuters reported that the facility will be built in Nuevo Leon, which shares a small border with Texas. 

The factory will be worth more than $5 billion and will become the biggest electric vehicle plant in the world once it is done. "This will be supplemental to the output of all the other factories," Musk said.

This news was announced by Mexican President Andres Manuel Lopez Obrador yesterday who revealed that the new facility will be built 387 miles away from Tesla's headquarters and the Austin Gigafactory.

The next day after that announcement from the president, Musk officially announced the news and released a public statement regarding its plans for a new Gigafactory in Mexico, after months of speculation and conversation between the CEO and the President.

Also Read: Workers at Tesla's Texas Gigafactory to File Lawsuit for Labor Breaches

Before this news was revealed, Tesla also managed to negotiate a deal that will allow efficiency for travel between the sites. For the previous months, Electrek reported that people crossing the border between Texas and Nuevo Leon were given a hint about this deal.

A Tesla-marked lane for cars and trucks was seen at the border as the company struck this deal with the state to reduce waiting times for cargo going shipment through the border, as Nuevo Leon Economy Minister Ivan Rivas explained. Additionally, Tesla has several suppliers in the state.

Choosing Nuevo Leon

Musk was previously choosing three Mexican states last December before settling with Nuevo Leon. While the initial investment was claimed as $800 million to $1 billion, The Verge reported that the expected cost at full maturity will be $10 billion. 

Deputy Foreign Minister Martha Delgado stated that Nuevo Leon was selected for its plant due to its proximity to Austin headquarters. As other plants hired 10,000 workers for its own Gigafactory, this factory will only employ 5,000 to 6,000 people.

This project was also welcomed by Mexican Association of Automotive Distributors Executive President Guillermo Rosales. 

He stated, "Generation of employment, consolidation, and development of suppliers; as well as the level of confidence that it provides for the decision-making of other players in the automotive industry to invest in Mexico are some of the benefits."

Related Article: Tesla Seeks Massive Texas Gigafactory Expansion Worth Over $700 Million