Mexicali City, The president of Mexico, stated on Monday that the state of Nuevo Leon in the north of the country, which is thought to be the likely recipient of a significant investment from Tesla Inc (TSLA.O), suffers from a water shortage and praised the advantages of the poorer southern region, where he has fought to promote development.
The remarks coincide with concerns from some investors and experts that Mexico’s geographic advantages as a nearshoring location for companies intending to sell into the United States are somewhat muted by the federal government’s oppressive influence.
In Tesla’s search for a location to open its first plant in Mexico, the neighboring state of Nuevo Leon with the United States has emerged as the leading contender. Nevertheless, President Andres Manuel Lopez Obrador claimed that the manufacturer of electric cars had yet to make a final choice and that he would discuss the site with business executives.
“In Nuevo Leon, things are going well. It’s near to the border, they have engineers, and they have a qualified workforce “During a news conference, he stated. “But what about the water?”
Indicating that certain northern zones forbid water extraction, López Obrador promised to convey to Tesla the necessity for cautious preparation for water, energy, and other services. At the same time, 70% of Mexico’s water is in the southeast.
The president, who will speak with Tesla CEO Elon Musk, said, “There’s water, gas, power… that’s part of what we want to make known.”
Due to the need for more industrialization in the south of Mexico compared to the northern border region, Lopez Obrador has prioritized attracting investment there.
This year, his administration gained support when the brewery Constellation Brands decided to construct in the southeastern state of Veracruz rather than continue with a partially completed project in the arid northern city of Mexicali due to Lopez Obrador’s worries about water scarcity.
According to Mexican publication Milenio, following Lopez Obrador’s remarks on Monday, Nuevo Leon Economy Minister Ivan Rivas said businesses had not been hindered from investing because of water access.
