Tesla Announces Gigafactory Mexico To Manufacture Its Next-Gen Vehicle

Tesla Inc. TSLA said on Wednesday that its next Gigafactory will come up in Mexico.

What Happened: “Our next Gigafactory will be in Mexico, manufacturing our next-gen vehicle,” Tesla tweeted, with a conceptual image of the Gigafactory.

Elon Musk clarified during the Investor Day that the factory would be located near the Mexican city of Monterrey, without providing details on the cost of the plant.

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The new Gigafactory will focus on manufacturing vehicles and not batteries, as noted by Tesla in tweet.

Though consumers expected details on the next-gen vehicle during Investor Day, Musk deflected it saying, "We'd be jumping the gun if we were to answer that question."

Tesla’s Cybertruck, a futuristic vehicle as said by Musk, with better utility than a truck and more performance than a sports car, is expected to start production later this year.

Mexico President Andrés Manuel López Obrador said on Tuesday that Tesla would be opening a new plant in the northern part of the country, its third international plant after Shanghai and Berlin.

On Friday, the president said that Tesla wouldn't be provided permits to build a plant in the US-Mexico border state Nuevo Leon given water supply constraints. However, Musk and the president spoke on Monday, leading up to the new Gigafactory announcement.

Mexico is also presently in talks with several automakers including General Motors Co. GM and Fiat Chrysler to start EV production in the country.

Price Action: Tesla shares fell 5.7% in extended trading after it closed at $202.77 on Wednesday, according to Benzinga Pro data.

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