Tesla’s next North American Gigafactory location, which was set to be built in Nuevo Leon, Mexico, has been paused, the automaker said during its Q2 Earnings Call yesterday, as the U.S. Presidential Election nears.
The decision comes as former President Donald Trump is gaining momentum as election season nears, and his policies would place tariffs on cars built in Mexico and sent to the U.S.
CEO Elon Musk, who has said he is fully supportive of Trump and will vote for him in the next election, confirmed during the Q2 Earnings Call that plans for Gigafactory Mexico are currently on hold:
“We’re currently on pause on Giga Mexico. I think we need to see just where things stand after the election…Trump has said that he will put heavy tariffs on vehicles produced in Mexico, so it doesn’t make sense to invest a lot in Mexico if that is going to be the case. So we will kind of need to see how things play out politically.”
Tesla Giga Mexico projected to result in job boom for Nuevo Leon
Musk and Tesla confirmed that they would increase manufacturing rates at their two current U.S. plants to enable sequential growth over the next few years and keep up withe demand.
These factories are located in Fremont, California, and Austin, Texas.
Musk detailed the plans during the Earnings Call:
“We are increasing capacity at our existing factories quite significantly, and I should say that the Robotaxi will get produced here at our headquarters at Giga Texas, as will Optimus towards the end of next year for Optimus production version two; the high-volume version of Optimus will also be produced here in Texas.”
Trump’s campaign relies heavily on the prioritization of U.S. manufacturing and the purchase of U.S.-built products. He also believes the EV sales goals need to be put to the side, allowing consumers to choose what powertrains they prefer instead of being incentivized by subsidies and tax breaks.
Musk also said during the call that a Trump presidency could be “devastation” to competitors but would not impact Tesla as negatively.
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