Tesla Seeks Local Parts Suppliers in Mexico

Tesla is ramping up efforts to find local parts suppliers in Mexico. The manufacturer is preparing to start building a new factory in the country, and is looking to establish a local supply chain before opening.

Tesla builds supply chain in Mexico

Tesla is seeking local suppliers in Mexico ahead of the start of construction on the factory, a company official in the country said Friday. Eugenio Grandio helps oversee the construction plan for the Nuevo León factory. He said the manufacturer is looking to work with local companies that can grow with Tesla.

“There’s gonna be a lot of possibilities for companies from all over the world coming to Mexico, joining us, and creating also talent that could innovate internally to help us continue growing,” Grandio said during a panel discussion at an event hosted by the Bolsa Mexicana de Valores in Playa del Carmen, Mexico, according to BNN Bloomberg.

Tesla suppliers will boost the country’s economy

The local supply chain will ensure the growth of the entire region and Mexico as a whole. It will also greatly benefit Tesla, which will be able to spend less time and money shipping parts to build its next-generation vehicles. Earlier, the company’s Chinese suppliers said Tesla had urged them to consider a location in Mexico in order to continue cooperation at the new factory.

Suppliers in Mexico will keep Tesla running smoothly

One of the reasons Tesla chose Mexico was its proximity to the United States. This will help avoid supply chain issues that many manufacturers have experienced with international shipments during the pandemic. The US is Tesla’s biggest market, so it is wise to build production as close to the country as possible while taking advantage of the benefits Mexico offers.

Grandio said there are already a large number of automotive suppliers in Mexico. Tesla currently has about 130 suppliers in the country. Here, nearshoring is colliding with the “radical transformation” of the auto industry, he said. “There are a lot of possibilities where some older suppliers that used to make components for combustion cars will transition to electric.”

Latin America must hurry to switch to EVs

Grandio said the world is already ready for the transition to electric vehicles. The US, Europe, and China have introduced various regulations restricting the sale of internal combustion engine vehicles or tax breaks on the purchase of EVs. According to him, Latin America should not be left behind. Countries here also need to consider taking similar steps to encourage the adoption of electric vehicles.

“These cars are being made, but are not being sold in Mexico,” he said. “We need to step up our regulation.”

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