Mexico and Tesla close investment deal after president calls – sources

MEXICO CITY, Feb. 27 (Reuters) – Mexico and Tesla Inc (TSLA.O) are about to announce a deal on the electric vehicle maker’s plans to invest in Mexico after President Andres Manuel Lopez Obrador and Tesla Chief Executive Elon Musk spoke on Monday, Mexican officials said.

Lopez Obrador previously revealed he would talk to Tesla’s “owner,” which officials say Musk meant.

One of the officials said after Monday’s call that Tesla was coming to Mexico. A second official said the two sides are “90 percent” on their way to an agreement.

“The call went very well,” said a third Mexican official.

A fourth Mexican official said details of an agreement between Mexico and Tesla would be revealed on Tuesday.

Tesla did not respond to a request for comment.

The call was announced after Lopez Obrador said Friday that Tesla would be denied permits to build a factory in the northern state of Nuevo Leon, where the company is considering investing, if water is scarce in the arid region.

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Two of the officials said Musk and Lopez Obrador had already spoken on Saturday. The call lasted about 40 minutes on Monday and about 35 minutes on Saturday, one of the officials said.

Lopez Obrador’s office did not respond to a request for comment.

The discussions around Tesla have become an important test of whether Lopez Obrador can set the terms for major investment in Mexico in pursuit of a policy of resource nationalism that has continually raised doubts among corporate groups.

The comments last week from leftist Lopez Obrador were the strongest sign yet that his water supply concerns could become a deal breaker for Tesla’s plans in Nuevo Leon, an opposition-run state on the US-Mexico border.

After Monday’s call, one of the officials said Nuevo Leon was still in the race. The government of Mexico has also said the company is considering investing near a new airport in Mexico City.

Reporting by Dave Graham and Diego Ore in Mexico City Edited by Brendan O’Boyle and Matthew Lewis

Our Standards: The Thomson Reuters Principles of Trust.


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