Helicopter flights and ‘selfies’ in Huasteca and the 50-property offer: these were Musk’s negotiations in Mexico

A virus a thousand times thinner than a hair has led to a project worth more than $6,000 million in the state of Nuevo León. The blockage in the supply chains between Mexico and the United States caused by the pandemic was the beginning for the richest man on the planet, Elon Musk, to consider the country the home of his new factory for his electric car, Tesla. The story goes back to the end of 2021, when the billionaire urgently called the consultant, Marcelo Ebrard, to ask him to reactivate the 127 Mexican factories that had some supplies with his company and which at the time were paralyzed by the state of health. crisis. This link helped the federal government gain first-hand exposure to Musk’s ideas abroad.

From that moment on, says Undersecretary of State for Multilateral Affairs (SRE), Martha Delgado, they began working on a proposal to Tesla. Finally, the initiative was officially announced in February 2022. “The Ministry of Foreign Affairs made a personal mark, which is a direct accompaniment of the company to provide legal advice and guidance in the country. Scouts What have you done. We took them to five states, State of Mexico, Queretaro, Puebla, Hidalgo and Nuevo León. They had some criteria, some very specific conditions for the plant and they were analyzing it on every single one of the lands, and they reviewed at least 50 properties,” the federal official details.

In conjunction with the federal government, each state offered the billionaire bonuses and attractive items for their entities in an effort to impress him. In the case of Nuevo León, Governor Samuel García announced that the first contact occurred during a visit they made to Texas. Second, the president noted that his economics team’s previous affinity with some Tesla executives allowed them direct access to send them economic and demographic information on the state’s industrial regions. Hector Tijerina, executive director of the Invest Monterrey Association, notes that they helped the local government last summer with data for the state to catch Tesla’s eyes. “They wanted to know about industrial regions, the university ecosystem, the average cost of land, average salaries for different types of jobs, from operators to general managers, economic data, demographics, and quality of life issues,” he explained.

Tijerina, who worked for 10 years in the state’s Ministry of Economy, adds that Nuevo León’s geographic location is an advantage that no other entity can match. “We’re 600 kilometers away, about six hours between Monterey and Texas, and that’s very attractive for Tesla, and that way, they’re creating a corridor where they’ll have their entire supply chain to supply both manufacturers, and their suppliers just have to set up an operation in the area to be able to supply both the Tesla in Austin and the Tesla in Monterey,” he states. In addition, he points out that Nuevo León has labor peace, productivity and an attractive university ecosystem for the type of job profile a company requires. Santa Catarina is located a few kilometers from San Pedro, the city-municipality with the highest socio-economic level and highest quality of life in the country.

The director of Invest Monterrey admits that despite their cooperation in the first phase of this process, negotiations with Tesla managers have always been carried out by the state government, which was the one that finally invited the billionaire to the entity last October to learn about more land, industrial zones and logistical facilities that Provide it. Regarding this visit, the prefect told EL PAÍS in a previous interview that at this meeting the owner of Twitter also ended up being convinced that his next factory was based in the municipality of Santa Catarina. A helicopter ride over Huasteca was enough for the millionaire to take out his cell phone and start doing it Personal Photos. “In front of us (Mask) he said to the construction manager: ‘I want the factory here.’ It was unimaginable to go down to the ground and force us to go down, he saw it, he loved it, he loved the mountains, and I saw him there very convinced,” García told EL PAÍS.

The decision has been made. After more than 14 months of work by both the federal and state governments, the world’s richest man has chosen Santa Catarina to install a three-storey factory on 1,600 hectares where one million cars will be produced annually. In perspective, Federal Undersecretary Delgado warns that the municipality and Mexico will win the long-awaited project that other countries have been looking for due to three factors: the network of free trade agreements that the country has, its proximity to the United States, and thus to Musk’s pockets of production in America’s lands. North and finally for the quality of the work of the Mexican engineers.

Details about the stimulus package are still being negotiated behind closed doors. Governor García stated succinctly that the company would lay out its requirements in the coming weeks, and from then on the government would either reject or accept his proposal, until a final memorandum was reached. On behalf of the federal government, Delgado emphasized that Tesla has not requested additional stimulus, however, other benefits are on the table for the electric battery manufacturer seeking to land in the country. “From the federal government they don’t have additional incentives to those that any other company in Mexico has. In fact, they didn’t look for them. Rather, for the other plant they want to install in battery country, we need a very smart scheme because electric battery stations in The US has massive subsidies and in Mexico we don’t have that and the current situation is not competitive. Here we need to take advantage of some tax incentives that can make electric battery manufacturing in Mexico competitive,” he explains.

Musk has already announced his first huge investment in Santa Catarina, however, the portfolio of projects being pursued by the federal government far exceeds the first $6,000 million that will be spent on this mega-factory. The Undersecretary of State specified that the construction of an electric battery factory not only for Tesla cars, but also for other brand cars is still in the pipeline; Space Technology Center in the Trans-Isthmus – Isthmus Region of Tehuantepec – as well as a scientific and technical collaboration for lithium refining in Sonora. The official indicates that they will continue to hold meetings with Tesla’s management team in the coming days to evaluate these offers. Delgado estimates that in a best-case scenario, this additional portfolio would be valued at approximately $5,000 million.

On the eve of Musk making his decision to invest in official Nuevo Leon, the project wasn’t immune from the political turmoil that marked President Lopez Obrador’s interest in the millionaire considering options downtown. The president threatened not to grant the permits if the project reached Nuevo León, however, the controversy was settled after two video calls between Musk and the executive branch. After those calls, the president indicated that an agreement had been reached with the foundation, and even thanked Musk for coming to the country.

With the ambitious goal of producing 20 million electric cars per year by 2030 at profitable prices on his shoulders, Musk made a final decision in favor of Nuevo Leon. In Tesla’s road map of the future, Santa Catarina Heights is now shown on the map.

Subscribe here to the news From EL PAÍS México you will receive all the essential information about current affairs in this country