Tesla has hired a number of suppliers in the Mexican state of Nuevo Leon since it relocated its headquarters to Texas and began building cars at its factory close to Austin. Despite being a sizable state, it only shares a nine-mile border with Texas and has only one border crossing.
According to Nuevo Leon’s economic minister, Ivan Rivas, the state is quickly becoming into a center for electromobility. According to him, EV enterprises might account for up to 7% of new investment in the state this year. Unbeknownst to most of us, 6 companies with plants in Nuevo Leon provide parts to Tesla. EnFlex and Quanta Computer from Taiwan, Faurecia from France, ZF Friedrichshafen from Germany, and APG Mexico.
It can be difficult to get all those goods where they need to be on time. For local businesses doing business with US corporations, particularly Tesla, Nuevo Leon wants to reduce congestion at the border. One way to do this is by providing specific lanes for their trade. During rush hour, lines at the border crossing between Texas and Nuevo Leon can be up to 25 minutes lengthy. Tesla suppliers may cross the border in less than 10 minutes by using the new dedicated route.
According to Ivan Rivas, the Mexican state is now home to at least six suppliers for Tesla, compared to having no businesses involved in the electric vehicle market before 2021.
He projects that between 5 and 7 percent of the state’s investment this year will come from the EV sector pic.twitter.com/t2yXsnAvZV .
Green Bloomberg (@climate) July 21, 2022
According to Bloomberg, Ivan Rivas It was a straightforward reward. What we need is a crossing that is more faster and more effective. And perhaps in the future, other businesses will have a lane much as Tesla does. Rivas anticipates Tesla bringing on additional suppliers in Nuevo Leon. On the other hand, more businesses might decide to set up shop there if they can take advantage of the state’s laws for quick border crossings.
In commercial decisions involving international trade, politics might be crucial. According to reports, CATL is thinking about building a new $5 billion battery manufacturing in Mexico. It seems like CATL wants to avoid any border crossings that would leave its shipments up to the whims of governor Greg Abbott, who can go full Chris Christie at any time for any reason or for no reason at all.
The effects of the Covid-19 outbreak have made supply chain management a crucial aspect of the worldwide business community. Although a dedicated lane at a border crossing can appear insignificant, minor things can have a big impact on business decisions. It might be a straightforward incentive, but it’s a crucial one as Tesla and other companies continue to scrutinize their supply chain decisions.
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