Tesla Gigafactory Mexico will receive $153 million worth of incentives from Nuevo León as state officials seek to temper concerns about delays in the new factory.
Nuevo León’s state economic development council approved Tesla Giga Mexico’s incentives, which include the buildout of basic infrastructure like roads and water treatment. The incentives also include a reduction in payroll tax reaching 2,627 million pesos, equivalent to 3.37% of Tesla’s investment—not including its employees.
“Tesla marks a before and after in the economic development of the State,” said Iván Rivas, State Secretary of Economy.
“For example, the Nevada gigafactory generated an economic impact 28 times greater than public investment, while in California, 120 jobs were created in the supply chain for every 100 Tesla jobs. In this way, in Nuevo León, there would be 12,000 new direct jobs related to Tesla, almost 15% of the jobs created each year in the state,” Rivas elaborated.
Tesla’s land permit for the construction of Gigafactory Mexico was recently approved by the Federal Ministry of the Environment. Tesla Giga Mexico is the most significant investment project in the history of Nuevo León at $4.5 billion for its first phase alone. The state estimates Tesla’s new factory will generate 4,500 jobs in the manufacturing and technology sectors.
The state expects more than 60% of Giga Mexico’s supplies to be local. Over 30 Gigafactory Mexico suppliers expect to arrive in Nuevo León due to a nearshoring trend leading companies to. Move production away from Asia and closer to the United States.