Tesla CEO Elon Musk commented in a somewhat pessimistic tone in the third-quarter earnings announcement on Wednesday, and it wasn’t just about the cybertruck, the Giga Mexico plant was also mentioned in the same gloomy context.
While he said he wanted to” temper expectations ” for the cybertrak car, blaming production complications for the slow ramp-up, he was also cautious when talking about the company’s future plant in Mexico.
He noted that Tesla is moving forward with plans to build a Giga Mexico plant facility for the production of affordable cars, but the company is in no hurry to do this due to concerns about the global economy.
“In Mexico, we are laying the foundation to start construction and implement all the long key elements, but I think we just want to get to know what the global economy is like before we do our best,”he said in the phone call. .
He seemed especially worried about high interest rates, saying that they make it difficult for buyers to buy new cars. Musk warned that if interest rates remain high or rise even higher, it will be difficult for people to buy a car because most buyers use some form of financing when buying a car.
“I’m not saying that things will be bad, I’m just saying that they might be,”said the head of Tesla about his cautious view of the economy. He added that it may be necessary because he remembers how General Motors and Chrysler were pushed into bankruptcy in 2009 by the Great Recession.
Musk also reassured investors. “If interest rates fall, we will accelerate,” he said, referring to the Mexico factory. If Tesla needs more capacity before Giga Mexico starts operating, Musk noted that the plant in Austin, Texas, has a lot of room to expand vehicle production.
Mexico pledges to cover infrastructure costs, says construction could start in the first half of 2024
In response to Musk’s comments, the Mexican state of Nuevo Leon, where the site of the future plant is located, pledged to provide funding for the construction of the plant. And on Thursday, October 19, local authorities announced that they will spend more than 130 million dollars on infrastructure to support the construction of Giga Mexico, according to Reuters.
The mayor of the city of Santa Catarina said that local officials are working to improve infrastructure in the area in preparation for Tesla’s Giga Mexico.
