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Tesla receives green light for another Gigafactory — here’s how it could alleviate global production setbacks

The factory could deliver as many as one million vehicles a year for both domestic and international customers.

The factory could deliver as many as one million vehicles a year for both domestic and international customers.

Photo Credit: Getty Images

Tesla’s proposed gigafactory in Mexico has been given a boost after the country’s federal environment ministry granted the company land-use permits.

According to Reuters, the new unit will cover 645 acres and cost around $5 billion, with the Nuevo Leon government expected to set aside $130 million for associated infrastructure.

Tesla has six gigafactories as it stands, with four in the United States, one in Germany, and one in China, in addition to other facilities all over the globe.

The company is the largest electric vehicle manufacturer in the world, with Thomas Insights crediting its supply chain and in-house software for its success.

But it’s not all been easy sailing for Tesla in 2023. The company has had a down year by its standards, according to Thomas Insights, while it’s only just released the much-anticipated Cybertruck to limited customers after multiple delays and missed delivery targets. Meanwhile, company CEO Elon Musk is battling with striking workers in Sweden. 

The new facility in Mexico is expected to be the production site for a new line of vehicles, as Musk said in a third-quarter earnings call, per Freight Waves. But the CEO has expressed concern about building in the country because of its uncertain financial situation.

Amid all that, though, steps are seemingly underway for the next phase of Tesla’s expansion.

Musk has previously said that the Mexico unit would begin production in 2025, per Freight Waves, so we’re still some way off from seeing zero-tailpipe-pollution cars rolling off the line in Central America. 

But with production setbacks elsewhere — strikes in Sweden slowing things down and the Cybertruck being far more complex to deliver than previously expected — the Mexico gigafactory could provide a much-needed production boost in the future. 

As Reuters reported, Mexico’s deputy foreign minister Marth Delgado told Milenio Television that the factory could deliver as many as one million vehicles a year for both domestic and international customers.

Since Mexico has the ninth-largest identified lithium resources in the world, according to the U.S. Geological Survey, it could also allow Tesla to make use of the material for future vehicle batteries — meaning the company won’t have to rely as much on costly imports.

The volume of vehicles and potentially lower cost of resources could be a huge benefit for motorists looking to switch from a high-polluting, dirty-fuel-powered car to a clean electric model, as it should help to drive prices down. 

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