Tesla is set to receive an incentive package totaling 2.63 billion pesos (approximately US$153 million/C$205 million) from the Mexican state of Nuevo León for its upcoming Gigafactory. The approval of this incentive package was confirmed by the state's economic development council on Thursday.
As outlined in a government statement, the incentives encompass various initiatives, including the development of crucial infrastructure such as roads and water treatment facilities. Tesla will also benefit from a reduction in payroll taxes as part of the incentive package.
This incentive announcement follows Tesla's request for the government to provide necessary infrastructure for the Gigafactory site. In October, the government committed over $130 million to fund the construction of essential infrastructure, covering areas such as water, electricity, gas, and transportation. The recent announcement formalizes this commitment.
This week, the Nuevo León state government granted all required permits for Tesla to commence the construction of Giga Mexico. The timeline for the actual start of construction remains uncertain. While Tesla initially announced Giga Mexico in March, there has been no visible progress at the site since then. During the Q3 2023 earnings call in October, CEO Elon Musk mentioned that the company is not in a rush to begin construction, citing various factors contributing to the delay.
Tesla has committed to investing approximately $10 billion in the Gigafactory over several phases, with an initial investment of $4.5 billion. The establishment of Giga Mexico, along with contributions from related suppliers, is expected to inject around $15 billion into the local economy over the next two years.