GigaMexico Delayed
According to some recent reports, it looks like Tesla’s new gigafactory in Mexico is going to be delayed until 2025.
According to the Late Post - a Chinese publication - Tesla has been telling its partners there that they should make preparations to supply their Mexico facility by the first quarter of 2025 - 6 months after the original completion date sometime in the second half of 2024.
Which is disappointing - but not unexpected.
GigaMexico is being built on a huge, 4,200 acre chunk of land in Monterrey - an area of mostly rocky desert and scrubland. The location is great for trading back and forth with Tesla’s other facilities in the US - it’s just 200 Km away from the border where the company has a dedicated customs area.
The problem is that Tesla hasn’t ever made a facility in this sort of location before - and reportedly, this is exactly the explanation they gave to their partners in China.
For starters, there’s almost no existing infrastructure to hook into - and what is there isn’t very suitable for a large production facility. One of the big issues of this area was how dry it was - and when making the deal with the Mexican government, Tesla had to make sure their water use was below a specific amount. Finding that water in the first place is likely causing some headaches for the engineers.
But there’s also the higher labour costs - and of course the expenses of hauling building material and heavy machinery out into the Mexican desert. Normally those things would all be cheaper in this location - but just like with infrastructure, the desert makes everything harder to accomplish.
Even without these sorts of obstacles, large building projects often face little delays along the way. Tesla might be famous for building their gigantic factories quickly - but construction is notorious for throwing wrenches into a carefully planned schedule. A 6-month delay is annoying, but barely noticeable by average construction project standards.
Regardless, GigaMexico is a lynchpin facility for Tesla’s plans in North America for the next decade at least. When the facility was announced during the Investor Day Event on March 1st, presenters implied that the new factory would be a model for Tesla’s new, and more efficient production techniques - and would likely be the site where the company would develop and build their new affordable model of electric car.
This location is just too important for Tesla to let construction lag, so these problems likely won’t take long to figure out.