2 minGiga Mexico three and a half years on: what happened to Tesla's factory near Monterrey
In 2023, Tesla announced a large factory in Nuevo León. It was slowed, then paused. A look at what was promised, why it stalled, and how it fits Tesla's plans today.
In early 2023, Mexico celebrated a big win: Tesla would build its next Gigafactory near Monterrey. More than three and a half years later, the site still has no Tesla factory. Here is what happened, based on what has been reported.
What was announced
- Date: Mexico's president announced the plant on February 28, 2023, and Elon Musk confirmed it at Tesla's Investor Day a day later.
- Location: Santa Catarina, near Monterrey, in the state of Nuevo León.
- Investment: about $10 billion from Tesla, or roughly $15 billion including suppliers, according to the state government.
- Purpose: it was widely expected to build Tesla's next-generation, lower-cost car.
Why it stalled
In October 2023, Musk said Tesla was not ready to go "full tilt" because of economic uncertainty. Environmental permits had been granted, and the state worked on roads and water connections, but Tesla itself did not start building. In mid-2024 Musk said construction was on hold until after the US presidential election, because the incoming administration had threatened tariffs on cars made in Mexico. That was described as a pause, not a cancellation.
Since then, we have found no reports of Tesla starting construction. Around 30 Tesla suppliers are active in Nuevo León, so the region still plays a role in Tesla's supply chain.
How it fits Tesla today
Tesla's plans have shifted. Instead of a brand-new cheap model from a new factory, it launched cheaper Standard versions of the Model 3 and Model Y built on existing lines, and it is putting much of its money into robotaxis, the Optimus robot and chips. On its third-quarter call, Tesla said its factories run at record rates, and Musk mentioned aiming for about five million vehicles a year around 2030. It plans a large second hall in Berlin, but did not mention Mexico.
What to watch
Whether Tesla formally cancels or revives the project, how US trade policy toward Mexico develops, and where Tesla decides to add the capacity needed for its 2030 ambitions.
