Elon Musk's Next Move Could Bring Tesla Plant to Mexico

Musk recently held a meeting in the state with Nuevo Leon Governor Samuel Garcia along with other local officials and Ken Salazar, the U.S. ambassador to Mexico, one of the sources said.

Musk is looking in particular at Santa Catarina, a municipality on the outskirts of state capital Monterrey, one of Mexico’s biggest and wealthiest cities, the person added. The sources did not detail what Musk’s potential investment may entail.

A spokesperson for the Nuevo Leon government declined to comment. Neither Tesla, the U.S. embassy, nor a representative for Santa Catarina immediately responded to requests for comment.

Musk’s visit to Nuevo Leon was originally reported by Mexican media. Several outlets published photos of Musk apparently from the visit, including one in which he appears with Garcia’s wife, Mariana Rodriguez.

Garcia posted several of the media articles on his Instagram account, in one case tagging Rodriguez’s account and writing, “Look, look,” without further comment.

The Texas-Mexico border area is home to hundreds of auto parts manufacturers, along with a major General Motors plant in Ramos Arizpe, Coahuila, and a sprawling Kia Corp. plant just outside Monterrey. The GM plant is retooling to make its first electric vehicles.

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Last year, Mexico exported just over 2.7 million vehicles, mostly to the U.S.

As the North American auto industry shifts from combustion vehicles to EVs, Mexico is seeking to draw more EV assembly and parts investment. Ford currently makes the electric Mustang Mach-E at a factory near Mexico City.

Chinese battery supplier CATL has also been considering opening a plant in Mexico since earlier in the year, but Reuters has reported that the company has slowed its investment plan more recently on concerns over how new U.S. rules on battery sourcing will increase costs.

GM’s global revenue rose 56 percent to $41.9 billion in the quarter ended Sept. 30. Adjusted earnings before interest and taxes rose 47 percent to $4.3 billion.

The automaker’s net margin slid to 7.9 percent from 9 percent a year earlier.

GM earned $3.9 billion in North America before interest and taxes, an 83 percent increase. Its North American adjusted margin rose to 11.2 percent from 10.3 percent.

“We’re delivering on our commitments and affirming our full-year guidance despite a challenging environment because demand continues to be strong for GM products and we are actively managing the headwinds we face,” GM CEO Mary Barra said in a letter to shareholders Tuesday.

GM shares rose 3.4 percent to $36.95 in premarket trading.

GM confirmed its previous full-year guidance of $9.6 billion to $11.2 billion in net income and adjusted EBIT of $13 billion to $15 billion.

GM said its U.S. dealers had 359,000 vehicles in inventory at the end of the third quarter, nearly triple the number they had a year ago.

Nio founder William Li said the number of Chinese automakers with “a real product” is between 20 and 30. Li said these include companies such as Geely and SAIC, which he says have established electric brands.

“All this competition is good because it moves the industry forward,” Li said in an interview with Automotive News Europe sister publication Automobilwoche.

“You have a lot of great automakers in Europe. Even in China, Mercedes, BMW, Audi, and the others are tough competitors. We still have a long way to go to be that strong,” Li said.

The automotive industry is currently one of the “most open markets” there is and if Nio can survive in China, it has the chance to be competitive in other markets, he said.