Mexico promises infrastructure spending and claims the Tesla factory is still coming

A day after CEO Elon Musk stated he was wavering on the project, the state of Nuevo Leon in Mexico announced on Thursday that Tesla was still planned to establish a factory and that the government would spend more than $130 million on infrastructure to facilitate construction.

Tesla did not specify when work would begin on the facility when it first revealed plans to build one in the state in northern Mexico in March.

Musk stated on Wednesday that he was still planning to build at the location in the northern Mexican municipality of Santa Catarina, but that the timeframe was unclear because of world economic issues and that work would probably not start until the following year.

Mexico has hailed the projected $5 billion Tesla project as evidence that the «nearshoring» movement is gaining traction as businesses look to shift production out of Asia and establish facilities closer to the US.

Investors are keenly observing Tesla’s future moves in Mexico following a contentious procedure for the company to validate its intentions there.

Samuel Garcia, the governor of Nuevo Leon, who declared during a visit to Shanghai on Wednesday that he expected approximately $1 billion in investments from Chinese suppliers to Tesla, was not available for comment.

Musk and representatives from Nuevo Leon discussed the idea over the phone this week, according to his office.