Impact of Tesla's Mexico Gigafactory Delay on Model 2 Launch

Tesla initially expected to start production at its new Gigafactory in Mexico by mid-2024; however, once again, Elon Musk's plans may have been cut short for various reasons. This is a piece of news that is not surprising given the history the Austinites have and that, once again, changes the announced dates to delay the project for a few months.

According to a report published by “Late Post China”, in which people familiar with the matter are cited as a source, the production of Gigafactory Mexico would have been delayed until at least the first quarter of 2025. This will mean between three and six additional months as compared to what was initially estimated by Tesla; information that was also confirmed by “Teslarati”. What caused this important change of dates? The aforementioned sources cite as the main culprit that Tesla apparently underestimated the difficulty that the construction of a Gigafactory in Mexico would entail, without going into any more details.

This has actually generated a somehow tense situation within the Austin brand where, according to “Late Post”, the same suppliers that the brand has in China would have been persuaded to help in the entire process of creating Gigafactory Mexico; otherwise, Tesla assured them that they could potentially lose their current association.

Tesla is actually counting on the fact that electric vehicles made in Mexico will cost more to produce than those from its Gigafactory Shanghai, in China; more specifically, between 18 and 20 percent more. This situation will generate a higher gross profit margin for the supplier that supports the construction of this Mexican Gigafactory, so it will be something remarkably beneficial for both parties. At the same time, Tesla wants to keep its trusted suppliers - mainly Chinese - close, since it would be less profitable for them to reach new agreements with other local companies, mainly due to the difference in costs between the two countries.

As a matter of fact, for now Tesla has not officially ruled on the aforementioned production start dates, as well as on the issue with its main suppliers. However, it is known that the Mexican Gigafactory will be located in the municipality of Santa Catarina, near Monterrey. The total investment is around 5 billion dollars, while at the same time it is expected to provide high-quality jobs for around 5,000 people.

Among other things, Tesla is expected to produce its new generation of more affordable electric vehicles in this Gigafactory - Mexico, such as the long-awaited Tesla Model 2, of which almost all of its key features and design are still officially unknown. According to the firm's plans, the construction of these new facilities will take between 12 and 15 months to be fully operational, notably longer than the construction of Giga Shanghai.

The start-up of the Gigafactory Mexico, a landmark in Tesla's expansion plans, appears to be trapped in temporary limbo due to unforeseen complications. Despite these setbacks, the sheer scale and potential profit from this venture suggests the company will push forward regardless. Ultimately, additional costs and delays are obstacles that Musk's powerhouse has tackled before and overcame.

The delays, while frustrating, are unlikely to dampen investor confidence or the perceived value of Tesla. With the much-anticipated Model 2 on the horizon, it seems these challenges are merely bumps on the superhighway to a future of sustainable, eco-friendly mobility generated by green energy.

Source: latepostchina

 

Nico Caballero specializes in Data Analytics and solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.