Tesla Suspends Mexico Gigafactory Construction Indefinitely

Teslahas officially suspended development of its Gigafactory in Mexico, explained that Elon Musk during a conference call with shareholders following the second-quarter 2024 financial results. The plant will be located on the outskirts of Monterrey, Nuevo Leon.

Tesla’s CEO said plans for the factory were on hold until after the November election. He explained that if Trump wins, he would likely impose high tariffs on cars imported from other countries, so there would be no point in selling cars assembled outside the United States in the United States.

This confirms rumors that have been circulating for months. It is no secret that Tesla has not yet started building the Gigafactory in Mexico. At first, there were allegedly delays due to administrative and bureaucratic procedures, but over time it became clear that something else was going on.

In March 2023, Gigafactory Mexico was announced as the plant where the next generation of the car, a fuel-efficient vehicle known as the Model 2, will be assembled. Tesla will take advantage of lower labor costs but proximity to the United States — unlike the Shanghai Gigafactory.

The company currently says it will continue to expand and increase capacity at emont and the Gigafactory in Austin, Texas.

But a few months later, Elon Musk changed plans to start production of the Model 2. It will be done first at the Giga Austin plant, where Tesla’s senior engineers are located. Once the processes are fully resolved, the production line will start in Mexico.

Musk’s political conviction to halt Mexico’s Giga?

But Elon Musk’s political convictions may also be behind the decision to halt construction of Gigafactory Mexico. While Tesla’s Veo a few years ago celebrated bilateral cooperation between the United States and Mexico for the company’s future, it might now be more in line with Donald Trump’s arguments.

The former president and current Republican candidate has based part of his campaign on bringing jobs and labor back to the United States. Building a factory in Mexico would run counter to Trump’s overall message, which Musk seems to be in full agreement with.