Finally, it’s been confirmed. Yes, they are doing it. It is happening, and this is exciting. California, Fremont, Nevada, New York, Germany, China, Texas, and now Mexico. This year has been amazing. This year just keeps on getting more amazing. Electric cars, well, they are the future. Toyota has just admitted that they believe that Tesla Model Y is an engineering masterpiece, and Tesla is about to unveil its, I’m assuming, Model Two platform. While the official release date and pricing for the Tesla Model C/ Tesla Model 2/ Tesla Model A have not been confirmed by Tesla, the Autoexpress reports that the initial production of the vehicle will take place exclusively at Giga Shanghai, China, with the possibility of it being assembled at Giga Berlin, Germany at a later date. It is expected that the Model C will be a hatchback, similar to the MG4 Electric and Volkswagen ID.3, or a rival SUV to the KIA e-Niro and MG ZS EV.
The President of Mexico just said that Tesla will build a plant in Mexico with a series of commitments to address the problem of water scarcity. The investment is expected to be over $1 billion, but of course, it will employ thousands. Tesla will build a new plant in Monterrey, Mexico. The nation’s president has announced, ending weeks, in fact, months of speculation that Tesla will build the factory in Mexico. Now, I personally thought it wouldn’t happen. I was wrong. The President of Mexico said that the company will build a plant with a series of commitments to address the problem of water scarcity. Now, whether or not those commitments come from the Mexican government or from Tesla, I don’t know. Could be both, maybe. I would assume.
Now, this happened right after the Mexican president actually spoke on the phone to Elon Musk. I’m not sure why that happened or how that was necessary, but apparently, it was, and that’s what got the deal over the line. The plant investment is expected, like I said, to be over $1 billion. But at this moment, Elon Musk nor Tesla have actually commented on this. They haven’t actually confirmed that it’s true. I’m guessing that they will officially comment on this at the investor day on March 1. “He was very responsive, understanding our concerns and accepting our proposals,” the president of Mexico said, “I want to thank Mr. Elon Musk for being very respectful, attentive and understanding of the importance of addressing the problem of water scarcity.”
Tesla shares fell 1.1% to $205 USD after this news was released, kind of a strange thing if you ask me. Now, what I do find a bit weird about all this is why is it that water is an issue for Tesla, but no one else? I mean, BMW announced the building factory in Mexico, numerous other car manufacturers are building factories in Mexico that have been announced recently. None of them, water was an issue. For some reason, the media didn’t say, “Hey, you know what? Water is a problem for them.” It just is for Tesla. It seems a bit strange to me. I mean, it’s not like Tesla is using abundantly more water than any other manufacturer in the world. Water is just a part of the manufacturing process of electric vehicles, period.
Now, the company’s commitments include using recycled water in the entire manufacturing process of electric cars, even for car paint. And he said that more details will be announced on Wednesday when Tesla has their investor day. He also claims that more commitments will be revealed then as well. So I don’t know what else will be revealed, but something else is happening as well.
Now, the leader of Mexico had previously publicly raised concerns about Tesla’s use in northern Mexico, about their use of water, about it being excessive, about it being a problem. On Friday, he reinforced this message by saying the company would not receive permits if there wasn’t enough water in the region.
And this comes after last June when authorities were forced to cut water access in Nuevo Leon, where Monterrey is located, to a maximum of 7 hours as dams were at risk of emptying entirely. That’s pretty drastic now. The Mexican government asked industries and farmers in Monterrey to offer part of their water to the population amid weeks of acute shortage, while AMLO asked businesses in the area to cut their water usage. So it’s actually one of the worst areas in the world for water shortages at the moment. Tesla ran up against consumer’s concerns about water scarcity while planning one of the two new car factories the company opened last year. This was in Berlin, Germany. I think that most of this was actually about so-called environmental activists targeting Tesla in Berlin. Realistically, they didn’t care about the fact that there’s an open pit coal mine just down the road from Tesla’s warehouse, where they use 141 times more water than Tesla’s factory. Environmentalists have just ignored that there’s nothing about that at all. But very strange, however. Musk actually laughed off a question about this issue in August of 2021. He said it contributed to delays that kept the plant from starting production until seven months later. And while Musk was right, he probably knew about the fact that there was a coal mine just down the road using 141 times more water. And that is ridiculous, really, isn’t it? Maybe they can use 140 times more water. That would be enough to cover Tesla’s entire water usage. Strange.
Anyhow, this factory will be Tesla’s first south of the US border, its first in Latin America, and its first outside Europe, China, and North America. AMLO has said that Mexico will be unable to provide subsidies for batteries or semiconductors comparable to the incentives being offered in the US. And the uncertainty of the location in Mexico touched off a marketing battle between different states whose leaders sought to promote their appeal for businesses. So if they’re unable to provide incentives for these things, there must be something else they’re actually giving to Tesla. The electric car industry has grown in Mexico, mainly as foreign demand for electric vehicles grows and massively increases. BMW announced a new investment of 800 million US dollars in the state of San Luis Potosi. Other automakers such as General Motors have also announced that they’ll be expanding their electric vehicle production in Mexico. And it is kind of interesting to see Tesla choose this location. I mean, the fact that it’s only 380 miles away from their factory in Austin, Texas, the fact that it’s not actually on the coast, it is a bit surprising to me that this would be the location that they would go with. I would have thought it would make more sense to maybe pick an area closer to the coast. It’s not that far from the coast, but it’s not exactly close by. I mean, it’s probably around about 150 miles away from the coast of Mexico. So I am curious about that. The other thing I’m really curious about is the fact that the population is not that big. I mean, Nuevo Leon only has a population across the entire state of 3.8 million people. So it’s not a massive population in terms of having a big workforce that you can employ. I mean, 3.8 million people are still a lot of people, just not one of the most populous places across Mexico. When you consider the fact that Mexico has a population of 127 million people, it’s only about 1.6% of the entire Mexican population that actually live in Nuevo Leon. So here the question remains. What exactly will Tesla do with this factory in Nuevo Leon? What will they build there?
A lot of people believe that this is where Tesla will be building their Tesla Model C, the Tesla Model Two (Tesla Model 2), the Tesla Model A, or whatever you want to call it, which is Tesla’s affordable platform, their $25,000 car. Does it exist or not? I don’t know. That’s just something that people speculate about. There’s no official confirmation from Tesla that they’ll ever build a $25,000 car. However, we do know that they will build a more affordable car.
How will The Tesla Model 2/ Tesla Model C/ Tesla Model A be?
I believe it will be a combination of two cars, the Model Three and the Model Y, as they both use about 74% of the same parts. This will result in a cheaper platform and a smaller crossover, probably similar in size to a B-class car, which could also double up as a hatchback. That’s my speculation, and that’s where I think Tesla will go. I think Tesla will build this car at this factory, in combination with more Model Y production, which I believe will be the best-selling car in the world this year, considering it was the fifth best-selling car in the world in 2022. Tesla’s production is massively ramping up this year for the Model Y.
Battery in the new Tesla Model
Will they also build batteries there? They may, but I don’t think they will. It doesn’t make sense because Tesla will get more incentives for battery production in the United States. Mexico has stated that they won’t be incentivizing battery production in the same way that the US will. You would think that it would have to be significantly cheaper for Tesla to manufacture cars in Mexico for them to do it, or else it wouldn’t make sense because they may not eventually qualify for the $7,500 EV incentives within a few years’ time. Therefore, I’m guessing that all of the costs, such as local labor, producer, building the factory itself, and paying taxes, will be massively reduced.
The new vehicle will use LFP (lithium iron phosphate) batteries, with the current supplier being CATL. However, it is possible that Tesla may turn to EVE Energy or BYD, which could supply its advanced “Blade” batteries. The monocoque of the Model C will be built from large castings, similar to the Model Y, and is expected to incorporate structural batteries with 4680 cells, which will help reduce costs and maximize the autonomy of the vehicle. The access variant of the Model C should offer around 250 miles (400 km) per charge, which is quite impressive considering its lower price point.
I want to know what you think. Let me know in the comments what car you think they’ll produce in Nuvon and what the battery production will be. What do you think is going on here?
Checkout my video about this below: