In recent days, several journalistic notes have been published that talk about the announcement that Tesla will build an electric vehicle plant in the municipality of Santa Catarina, Nuevo León. While some articles continue to argue that its construction in another state of the country was a better option, others simply show some skepticism about the positive impact of such an investment.
Regarding whether it was better to build the factory in another state of the country, my opinion is the following. If at some point the region surrounding AIFA, the state of Veracruz, Michoacán, Guanajuato and Hidalgo, was promoted, the proposal with the greatest media echo (in my opinion) was that the new factory be built in a state in the south of the country. This region has some competitive advantages, especially in terms of natural resources (energy and water generation potential). However, it does not offer the same conditions in terms of infrastructure and skilled labor.
Faced with this, it must be recognized that the south needs more roads, railways and airports to improve logistics and connectivity. As well as higher education centers that increase the number of graduates in technical areas. A favorable economic environment must also be created so that not only a factory is installed, but also a whole network of suppliers and services. This will inevitably level the playing field between North and South over time.
Although we must recognize the investment in projects that the federal administration is making to correct this situation (for example, the Interoceanic Train), we would have to wait a few years for these to consolidate and begin to generate the expected multiplier effect.
About skepticism. While there is much that still needs to happen, the announcement alone sends an important message to investors and the broader market. In my opinion, it contributes to the confidence in the rule of law, the economic and social stability of our country. Even at times when we experience higher production costs and interest rates.
Without a doubt, Tesla’s investment will generate a positive effect in the northeast region of the country. The plant is said to be at least three times larger than KIA’s current plant in the Pesquería municipality. Many of the production processes will be automated or robotized and it is expected to generate at least 5,000 direct jobs and 35,000 indirect ones. This considering the construction stage (which could last from nine months to a year) and the start of operation of the factory.
The new jobs would be created by the expansion of the supply companies that are located in Coahuila, Tamaulipas, Aguascalientes, San Luis Potosí and Nuevo León, companies that today already supply supplies to the Tesla plant in Austin, Texas. At the same time, we would expect research and development centers to be created, and knowledge transfer to our engineers.
For these positive effects to materialize, there must also necessarily be a good coordinated public policy between the three levels of government. If we have this element, it is possible to activate regional economic growth. Let’s just think about public investment to cover the demand for houses, public services, roads and educational centers, as the project progresses.
Regarding private investment, which has certainly expressed on different occasions the lack of projects in which it can invest, we could expect it to grow as well. As we have said, Tesla’s investment will probably encourage both the increase in the capacity of existing supply companies, as well as investment in new productive activities.