MEXICO CITY (AP) \u2014 Mexico is undergoing a fevered competition among states to win a potential Tesla facility in jostling reminiscent of what happens among U.S. cities and states vying to win investments from tech companies.<\/p>\n\n\n\n
Mexican governors have gone to loopy extremes, like putting up billboards, creating special car lanes or creating mock-ups of Tesla ads for their states.<\/p>\n\n\n\n
And there\u2019s no guarantee Tesla will build a full-fledged factory. Nothing is announced, and the frenzy is based mainly on Mexican officials saying Tesla boss Elon Musk will have an upcoming phone call with Mexican President Andr\u00e9s Manuel L\u00f3pez Obrador.<\/p>\n\n\n\n
The northern industrial state of Nuevo Leon seemed to have an early edge in the race.<\/p>\n\n\n\n
It painted the Tesla logo on a lane at the Colombia border crossing into Texas last summer, and erecting billboards in December in the state capital, Monterrey, that read \u201cWelcome Tesla.\u201d<\/p>\n\n\n\n
The state governor\u2019s influencer wife, Mariana Rodriguez, was even shown in leaked photos at a get-together with Musk.<\/p>\n\n\n\n
However, L\u00f3pez Obrador appeared to exclude the semi-desert state from consideration Monday, arguing he wouldn\u2019t allow the typically high water use of factories to risk prompting shortages there.<\/p>\n\n\n\n
That set off a competitive scramble among other Mexican states, like feeding time at a piranha tank. The governors\u2019 offers ranged from crafty proposals to near-comic ones.<\/p>\n\n\n\n
\u201cVeracruz is the only state with an excess of gas,\u201d quipped Gov. Cuitl\u00e1huac Garc\u00eda of the Gulf coast state of Veracruz, before quickly adding \u201cgas \u2026 for industrial use, for industrial use!\u201d<\/p>\n\n\n\n
A late-comer to the race, Garc\u00eda had to try harder: He noted Veracruz was home to Mexico\u2019s only nuclear power plant. And he claimed Veracruz had 30% of Mexico\u2019s water, though the National Water Commission puts the state\u2019s share at around 11%. Water, it turns out, is thicker than blood.<\/p>\n\n\n\n
The governor of the western state of Michoacan wasn\u2019t going to be left out. Gov. Alfredo Ram\u00edrez Bedolla quickly posted a mocked-up ad for a Tesla car standing next to a huge, car-sized avocado \u2014 Michoacan\u2019s most recognizable product \u2014 with the slogan \u201cMichoacan \u2014 The Best Choice for Tesla.\u201d<\/p>\n\n\n\n
\u201cWe have enough water,\u201d Ram\u00edrez Bedolla said in a television interview he did between a round of meetings with auto industry figures and international business representatives.<\/p>\n\n\n\n
Michoacan also has an intractable problem of drug cartel violence. But similar violence in neighboring Guanajuato state hasn\u2019t stopped seven major international automakers from setting up plants in Guanajuato.<\/p>\n\n\n\n
Nuevo Leon Gov. Samuel Garc\u00eda had to think fast to avoid being shut out entirely, and came up with a novel strategy.<\/p>\n\n\n\n
Garc\u00eda reached out to the western state of Jalisco, whose governor, Enrique Alfaro, belongs to the same small Citizen\u2019s Movement party. Together, the two came up with an \u201calliance\u201d Thursday that would allow trucks from Jalisco preferential use of Nuevo Leon\u2019s border crossing, the same one where a \u201cTesla\u201d lane appeared last year.<\/p>\n\n\n\n
Jalisco has an already healthy foreign tech sector, but most importantly, it has more water than Nuevo Leon.<\/p>\n\n\n\n
The two appeared intent on playing nice. \u201cWe are two states that do not have to compete and cannibalize each other \u2026 cannibalization for investment is a mistake,\u201d Alfaro said.<\/p>\n\n\n\n
L\u00f3pez Obrador\u2019s focus on water might be more about politics than about droughts, said Gabriela Siller, chief economist at Nuevo Leon-based Banco Base. She said the president appeared to be trying to steer Tesla investment to a state governed by his own Morena party, like Michoacan or Veracruz.<\/p>\n\n\n\n
That could be a dangerous game, Siller said.<\/p>\n\n\n\n
\u201cTesla could say it\u2019s not somebody\u2019s toy to be moved around anywhere, and it could decide not to come to Mexico,\u201d she said.<\/p>\n\n\n\n
Sam Abuelsamid, a principal research analyst at U.S.-based Guidehouse Insights, said playing one state off against another has been common practice in the U.S.<\/p>\n\n\n\n
\u201cYou remember a few years back, Amazon talked about building their headquarters, like every state, city in the country was putting in bids, trying to lure Amazon there,\u201d Abuelsamid said.<\/p>\n\n\n\n
There are doubts that whatever Musk eventually does announce will be an auto assembly plant. Foreign Relations Secretary Marcelo Ebrard said his understanding is that it won\u2019t be a plant, but rather an \u201cecosystem\u201d of suppliers.<\/p>\n\n\n\n
Musk previously has made promises that don\u2019t come true, or happen years after he says they will. For instance, in 2019 he promised a fleet of fully autonomous robotaxis on the roads sometime in 2020. Nearly three years later, Tesla has yet to sell any autonomous vehicles.<\/p>\n\n\n\n
While there has been little talk in Mexico so far of subsidies, many auto companies have gotten significant incentives to build plants in Mexico. That kind of race can be costly.<\/p>\n\n\n\n
\u201cIt\u2019s questionable whether it\u2019s actually that economically beneficial to localities or providing those subsidies,\u201d said Abuelsamid. \u201cThey\u2019re sometimes spending billions of dollars in tax breaks to lure a company in there.\u201d<\/p>\n\n\n\n
Musk at times has floated the idea of building a $25,000 electric vehicle that would cost about $20,000 less than the current Model 3, now Tesla\u2019s least-expensive car. Many automakers build lower-cost models in Mexico to save on labor costs and protect profit margins.<\/p>\n\n\n\n
A Tesla investment could be part of \u201cnear shoring\u201d by U.S. companies that once manufactured in China but now are leery of logistical and political problems there. That those companies will now turn to Mexico represents the Latin American country\u2019s biggest foreign investment hope.<\/p>\n\n\n\n
\u201cThe fight among states to attract investments from this nearshoring phenomenon is going to be tough, complicated,\u201d Alfaro said.<\/p>\n\n\n\n
As Ram\u00edrez Bedolla put it, \u201cwherever Tesla sets up, it is going to be big news in Mexico.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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