Tesla is building a new factory in Monterrey, Mexico [Updated]

After a phone call between Tesla CEO Elon Musk and Mexican President Andres Manuel Lopez Obrador, officials say a deal should be announced any day for a Tesla factory in Mexico.

Update: The Mexican president has now confirmed that Tesla will build a factory in Monterrey and details are likely to come tomorrow.

Rumors have been swirling for months that Tesla is about to announce a Gigafactory project in Mexico.

Last year we reported on Tesla CEO Elon Musk confirming that Tesla is considering locations for a new factory in Canada, Mexico and the United States when discussing Tesla’s next factory in North America.

In October, rumors of a Tesla factory in Mexico surfaced when Musk visited the state and met with the governor. Local media reported that Tesla was particularly interested in a location in Santa Catarina, a municipality just outside Monterrey in Nuevo León.

After the visit, the government confirmed talks about a possible investment in the state.

A deal was reportedly reached in December to bring a Tesla factory to Mexico and an announcement is expected within the month. Towards the end of the month, government officials claimed an announcement from Tesla was imminent, but two months later it has yet to come.

Things got more complicated lately when Andres Manuel Lopez Obrador, the president of Mexico, became personally involved in the negotiations. He said he would be reluctant to allow Tesla to build a factory in Nuevo León, a state controlled by his opposition, because of “concerns about water supply”.

Instead, he has urged Tesla to build a factory near Mexico City in a new business center he promoted next to a new airport.

Now the parties are closer to an agreement after two phone calls between Lopez Obrador and Elon Musk in recent days.

Reuters reports that Mexican officials confirmed the pair talked for 35 minutes on Saturday and 40 minutes on Monday. Government officials suggest a deal is very close and could be announced as early as today.

The new rumor comes ahead of Tesla’s Investor Day tomorrow, when Tesla is expected to explain how it plans to ramp up electric vehicle production to 20 million vehicles per year by the end of the decade.

The car manufacturer has indicated that it will have to build eight new Gigafactories to achieve this goal. Therefore, more locations are expected to be announced relatively soon.

Update: President Lopez Obrador has now confirmed that Tesla will build the factory in Monterrey, Nuevo León. Details are expected later this week – most likely tomorrow on Tesla’s Investor Day.

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