How could the Tesla plant in Monterrey impact the rest of the Mexican economy?

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A calculation by Banco Santander estimates that half of the investment that the American car company will make in Mexico, which is estimated to range between 5,000 and 10,000 million dollars, will affect Mexican companies. We explain it.

“If we calculate that they are 5,000 million dollars, being extremely conservative, half will be national content, 2,500 million dollars,” predicted the director of analysis and stock market strategy of Banco Santander, Alan Alanis.

According to him, large companies in the country would obtain benefits equivalent to about 80% of the investment made by Elon Musk’s company in the northern city of Monterrey, while around 20% would affect SMEs.

During a conference on the phenomenon known as relocation or “nearshoring”, bank analysts positively assessed the arrival of Tesla due to its impact on the Mexican economy.

The investment made by Musk ranges between 4% and 8% of the Mexican Gross Domestic Product (GDP), according to Alanis.

“This investment is larger than the three largest that have been made in the automotive industry in Mexico,” he added.

An aerial view shows a part of the urban area in the state of Nuevo León, where Tesla could build a new electric car plant, in Monterrey, Mexico, on December 19, 2022.
An aerial view shows a part of the urban area in the state of Nuevo León, where Tesla could build a new electric car plant, in Monterrey, Mexico, on December 19, 2022. © Reuters

For Rodolfo Hernández, the bank’s executive director of international business, Mexican companies have sufficient quality to be suppliers to companies like Tesla, since in recent years they have invested in “processes, products and training.”

“Companies know about the situation in the country and are willing to invest. Tesla is the best example, the conditions that Mexico offers can hardly be offered by another country and it will have benefits for SMEs and their employees, those that are going to be born and those that are already there,” he added.

According to the Undersecretary for Multilateral Affairs of the Mexican Foreign Ministry, Martha Delgado, the investment will be around 5,000 million dollars and it will be the largest electric vehicle plant in the worldTesla’s first in Latin America.

The Tesla plant in Monterrey would open a new era of electric vehicles in Mexico

The Monterrey factory will be one of the first in Mexico dedicated to the manufacture of electric vehicles and represents an opportunity for the Latin American country to go from supplying gasoline and diesel vehicle manufacturers to being a hub for other companies in the sector.

Mexico, according to analysts, offers advantages such as relatively cheap labor and free trade agreements with 50 countries, while the United States only has similar agreements with 20.

One of those agreements is the treaty between the US, Canada and Mexico, known as T-Mec, which will make it easier for electric vehicles manufactured south of the border to qualify for tax credits of up to $7,500 offered in the Law to US President Joe Biden’s Reduction of Inflation.

with EFE

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Written by Editor TLN

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