Tesla will construct a brand new plant in Monterrey, Mexico, the nation’s president introduced, ending weeks of hypothesis over the place the maker of electrical vehicles would select to function within the nation.

President Andres Manuel Lopez Obrador stated Tuesday that the corporate will construct the plant with a sequence of commitments to deal with the issue of water shortage. AMLO, because the president is understood, had a name with Tesla CEO Elon Musk on Monday.

There was no fast verification of the plans from Musk or Tesla.

“He was very responsive, understanding our issues and accepting our proposals,” AMLO stated. “I wish to thank Mr. Elon Musk for being very respectful, attentive and understanding of the significance of addressing the issue of water shortage.”

The corporate’s commitments embrace utilizing recycled water in your complete manufacturing course of of electrical vehicles, even for automobile paint, the Mexican chief stated, including that extra particulars shall be introduced Wednesday, when the automaker has an investor day. Further commitments will even be introduced subsequent week, he stated.

The chief of the Latin American nation had beforehand raised issues in regards to the lack of water for Tesla to construct in northern Mexico. On Friday, he bolstered the message by saying the corporate wouldn’t obtain permits if there wasn’t sufficient water in that area.

Final June, authorities had been compelled to chop water entry in Nuevo Leon, the place Monterrey is situated, to a most of seven hours, as dams had been vulnerable to emptying fully. The Mexican authorities even requested industries and farmers in Monterrey to supply a part of their water to the inhabitants amid weeks of acute scarcity whereas AMLO requested companies within the space to chop water utilization.

Tesla ran up in opposition to issues about water shortage whereas planning one of many two new automobile factories the corporate opened final yr. Whereas Musk laughed off a query in regards to the subject in August 2021, it contributed to delays that stored the plant from beginning manufacturing till seven months later.

The manufacturing facility can be Tesla’s first south of the U.S. border and a part of Musk’s plans to increase world manufacturing, including to the brand new crops in Austin, Texas, and Berlin. 

AMLO stated that Mexico can be unable to offer subsidies for batteries or semiconductors akin to the incentives being supplied within the U.S. The uncertainty over the placement in Mexico touched off a advertising battle between totally different states, whose leaders sought to advertise their attraction for companies.

The electrical-car business has grown in Mexico primarily as international demand for the automobiles continues, with BMW saying a brand new funding of 800 million euros ($851 mllion) within the state of San Luis Potosi.

Different automakers, resembling Common Motors, have additionally introduced that they’ll are increasing their electrical auto manufacturing within the nation.