Tesla Expected to Announce Mexico Investment Soon, Ebrard Says

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(Bloomberg) — Tesla Inc. is expected to announce an investment in Mexico very soon as the country works to expand infrastructure and renewable energy supply to take advantage of a boom in companies relocating, Foreign Affairs Minister Marcelo Ebrard said.

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The Mexican government has been working with the carmaker led by billionaire Elon Musk to help it find a location to set up a plant in the country and the company has seen several locations, Ebrard said, declining to give details of the project.

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“What I would think is that we’re very close to having this announcement by Tesla, but I don’t have an exact date yet,” he said during an interview on board a government plane taking him to Puerto Penasco, in the northwestern state of Sonora. “They will make their announcement. We can’t announce it.”

Tesla did not respond to a request for comment.

Read More: Tesla Looking to Land Near Mexico City Airport, Official Says

Ebrard, a top candidate for the ruling Morena party ahead of the 2024 elections, spoke on the way to visit the Puerto Penasco solar plant project, part of the government’s much lauded Sonora Plan, that envisions building extensive renewable energy infrastructure to help it meet ambitious climate goals and promote company investments.

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Mexico pledged to reduce carbon emissions by 35% in 2030 during the UN climate change convention in November alongside US special presidential envoy John Kerry. Ebrard reiterated that Mexico will need $48 billion in renewable investments to achieve that goal and is working closely with the US to obtain the funding needed for it.

The foreign affairs minister also said the plant — which belongs to state utility CFE — is among six that will help Mexico generate 80 gigabytes of clean energy through the end of the decade. The plan will rely heavily on demand from the automotive and aeronautical industries in the country and clean energy companies from California, he said.

Mexico, particularly its northern states, is a favorite destination for companies that aim to relocate operations from China closer to the US, a process known as nearshoring. About 400 companies are lined up to enter the Mexican market and 25 industrial parks are being developed, Ebrard said, dismissing concerns that trade disputes with the US and Canada may slow the relocation process.

“I have not seen that we have a brake on investment, rather the opposite. The concern we have is how to guarantee them the services they need in such a short time,” he said during the interview, adding that the country could grow above 4.3% per year “if we keep up the pace for the next three years” .

Shortages of electricity supply, in particular from renewable sources, is one of the main constraints that Mexico is trying to alleviate to promote nearshoring.

Read More: Chinese Manufacturers Skirt US Tariffs With Help From Mexico

—With assistance from Nacha Cattan and Dana Hull.