Mexico announces new Tesla plant to be built in Monterrey

By Michael Elkins

Mexican President Andres Manuel Lopez Obrador announced Tuesday morning that the government has reached an agreement with electric vehicle maker, Tesla (NASDAQ:) over the company’s plan to build a new plant in the northern city of Monterrey.

Speaking at a news conference, Lopez Obrador said Tesla would likely give more details of its plans on Wednesday, and that the new plant would be very big and create many jobs.

Lopez Obrador spoke with Tesla CEO Elon Musk before the announcement on Monday, which followed a separate conversation the two had held late last week. The call between the two took place after Lopez Obrador had on Friday stirred fears that he could block the investment in Monterrey if water was scarce in the arid region. However, the president said Musk had understood the challenge posed by water scarcity in the region, and that the company would be making a series of commitments as part of the deal.

Shares of TSLA are down 0.75% in early trading on Tuesday.