Hota Industrial Manufacturing will invest $99 million in its first U.S. factory in New Mexico. Hota is a Taiwanese gear and auto parts maker that works with established automakers like Tesla, Ford, and General Motors.
Hota’s New Mexico plant will be the auto and gear maker’s first factory outside Asia. The US-based plant is part of Hota’s efforts to focus on regional production in supply chains.
“With three years of COVID-19 and the U.S.-China trade war changing globalization and creating regional supply chains, we restarted our thinking about going to the United States to make a deeper investment,” Chairman David Shen said.
Hota aims to start constructing the New Mexico plant by early 2024. It will be built in Santa Teresa, near the U.S. border with Mexico. The gear and auto parts maker aims to start production at the New Mexico plant by 2025.
Shen added that building a plant in North America was crucial for Hota’s expansion plans, given the United States burgeoning electric vehicle (EV) industry. North America accounts for 60% of the Taiwanese company’s sales.
The Chairman of the Taiwan External Trade Development Council, James Huang, believes New Mexico will play an essential role in the electric vehicle supply chain in the United States. Last year, the United States passed the Inflation Reduction Act (IRA), which introduced tax incentives for electric vehicle manufacturing and EV battery cell production among other incentives. The IRA’s EV tax incentives are meant to encourage automakers to invest in and establish EV supply chains across North America and countries with free trade agreements with the United States.
New Mexico plans to provide $3 million in funding to Hota’s plant. The state is also considering additional tax credits.
“We have the right infrastructure to meet the growing demands of Taiwanese companies, and their manufacturing expertise is very beneficial because we don’t start it from scratch. We can’t compete with the Gear King,” the New Mexico Governor Michelle Lujan Grisham told Reuters.