Tesla's plans to produce cheap electric vehicles (EVs) in Mexico could be derailed by the results of this year's United States presidential election.
Subscribe now for unlimited access.
or signup to continue reading
The company's next-generation vehicles were set to enter production in Mexico next year, including a smaller, more affordable vehicle to slot in under the Model 3, as well as a robotaxi.
There have since been delays in completing construction of the Mexican plant, leading Tesla CEO Elon Musk to confirm the company's affordable future model will begin production at its Texas Gigafactory instead when development is completed.
At the time, Mr Musk confirmed the new vehicle would still be built in Mexico when the plant was ready. Now, he has said Tesla won't invest further in its planned Mexico facility until after the US election.
Mr Musk has cited "too much political risk" from nominee Donald Trump, as the candidate has pledged to impose more tariffs on Mexican-made goods.
At Tesla's earnings call this week, Mr Musk said he would "need to see just where things stand after the election."
"Trump has said that he'll put heavy tariffs on vehicles produced in Mexico," Mr Musk said.
"So it doesn't make sense to invest a lot in Mexico if that is going to be the case. We kind of need to see where things play out politically."
Mr Trump has already pledged that if he wins the election in November, he'll end EV subsidies in the US.
In a post on X earlier this month, Mr Musk suggested taking away EV subsidies would "only help Tesla". It's unclear whether that will be the case, or if a second Trump administration would hurt the EV industry as a whole.
Analysts have suggested the future growth of the EV industry could falter, as it's been heavily supported by various US initiatives like the Inflation Reduction Act (IRA). That act and its benefits could be drastically cut back if Mr Trump is elected.
Mr Musk objected that Mr Trump's plans to cut back the IRA would be detrimental to Tesla, even though the company has received significant support from manufacturing and investment tax credits through the IRA.
"It would be devastating for our competitors, and it would hurt Tesla slightly. The value of Tesla overwhelmingly is autonomy," Mr Musk said.
The Tesla CEO formally endorsed Mr Trump shortly after his assassination attempt earlier this month, and pledged to make hefty donations into a "super political action committee to help with his ground game".
Content originally sourced from: CarExpert.com.au
