Tesla May Seek Local Parts Suppliers For Gigafactory Mexico

Earlier this year, Tesla announced plans to open a new Gigafactory in the Mexican state of Nuevo León in the coming years. According to one company official, the plant may be looking to local suppliers that can grow alongside Tesla in the North American state.

Above: A Tesla Model Y (Image: Casey Murphy / EVANNEX).

Tesla employee Eugenio Grandio, who currently heads the automaker’s operations on constructing the new plant, says that CEO Elon Musk is focused on working with local suppliers for the company’s next-generation vehicle, according to a report from Bloomberg. The statement was made at a panel discussion in Playa del Carmen, hosted by the stock exchange Bolsa Mexicana de Valores.

According to Grandio, Mexico has an “amazing” amount of automotive suppliers, many of which already supply parts to Tesla. He also says that opportunities for manufacturers of internal combustion engine (ICE) parts are available as the auto industry shifts toward electric vehicle production.

“There are a lot of possibilities where some older suppliers that used to make components for combustion cars will transition to electric,” Grandio said during the panel. “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.”

The decision to put a new Gigafactory in Mexico follows a trend dubbed “nearshoring,” in which some manufacturers are establishing plants closer to U.S. consumers are located. The trend comes as an attempt to establish nearby supply chains in hopes to skirt issues with international shipping that were common during the COVID-19 pandemic.

Grandio started with Tesla in 2016, originally working to help deploy Superchargers. He says he jumped at the opportunity to work with the U.S. electric vehicle manufacturer after working for BMW for years.

“I applied for all the jobs: salesman, technician, whatever, just to get an interview,” he said. “I [once] drove a car to Queretaro and almost got stranded. And I said, we need to fix this. After two years we had installed 1,500 chargers throughout the country.”

The move to work with locals piggybacks on Tesla's already robust supplier network in Mexico, which Grandio explains included around 130 businesses already near the beginning of the pandemic.

Along with building EVs for the world, Grandio says Latin America “cannot be left behind” in the transition as the “table is set” for the shift in markets across the U.S., Europe and China. He points to things like tax credits for EVs and other policy shifts pushing the industry toward the new technology.

“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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