Let’s talk about the Tesla effect, what does Elon Musk’s company have that others don’t? There are many who refer to the investment coming to Nuevo León as if it were the birth of the electric vehicle industry in Mexico. A watershed in the industrial history of our country. It’s not that bad. Actually, there are five companies in Mexico that are ahead of Tesla, when it comes to electromobility. Less than a month ago, BMW announced an investment of 865 million dollars to make electric cars in San Luis Potosí. Along the same lines, we can say that Ford, GM, Volkswagen and Nissan have already launched projects to manufacture electric cars in Mexican territory.
This is different, you will say, it is a giga factory. There are only four others in the world, two in the United States, one in China and one in Germany. That’s where Elon Musk’s marketing talent shows up again. He invented that word, giga factory, in 2013. His intention is to differentiate Tesla’s plants from those of other companies in the automotive industry. How many plants like the one in Puebla does VW have in the world; like those of Nissan in Aguascalientes; like Kia’s in Pesquería…? I assure you that we can count them on the fingers of one hand. They are huge factories, almost cities, but it did not occur to them to baptize them with such a sexy name, like the one given to his creature by the richest man in the world. A giga factory, Musk dixit, is a place where batteries, auto parts, and sometimes vehicles are assembled. How new is this? As old as the Fordist model. Fashions come and go. In some moments the production is dispersed in several places and in other moments, the “fashion” is to concentrate it. For reasons of security, control, prestige and efficiency, perhaps.
Wait, here it is about an investment that will reach 10,000 million dollars. How many are that size? Here we all agree, if we remove the Dos Bocas refinery, the Mayan Train and the AIFA, we are facing an investment that has no comparison. Tesla’s is the largest private investment announced in the six-year term. The announcement shines brighter at the moment because this has been an administration with a bad record in attracting private investment. The figure is the lowest in four decades (as a share of GDP). The most optimistic believe that the importance of this investment is that it can serve to uncover other large investments that are stuck. Hopefully they’re right.
$10 billion is a lot of money, but Ten Billion from Mr Musk is something else. It is said that he produces something more valuable than cars, future. This investment is also a pretext to wind up the story of nearshoring or remember the relevance of the automotive sector in Mexico. It produces 4% of the GDP, more than a million jobs and is one of the six largest producers in the world. In the last 15 years, the automotive industry in Mexico registers an average of more than 5,000 million dollars of FDI per year. The accumulated investment of Ford, GM, VW, Nissan exceeds 10,000 million dollars in each of the cases, if we include the investment of their suppliers.
Taking all of the above into account, it will be necessary to find out if, beyond the show and the marketing, Tesla will bring a qualitative change with respect to other investments in the automotive or technological sector that already operate in our country. Will there be Tesla operations in research and development in Mexico? What role will there be for Mexican engineers and technologists? How will the supply opportunities be for Mexican companies? What will Tesla do in Nuevo León and in other states? Where will your suppliers be installed?
Elon Musk will offer more information in Texas today, but it will not clear up all the unknowns. We can anticipate that the economic benefit will not remain in Nuevo León and that most likely the other state that will benefit the most will be Coahuila. He is the neighbor most prepared to take advantage of the wave that is coming in Nuevo León. We can also guess that the number of job creation will not be spectacular, because many of the processes are automated or robotized.
Who earns more? We are so blinded by politics that the first list we make is political. Samuel García and Marcelo Ebrard appear in first place. The governor of Nuevo León was “stirred up” and encouraged Elon Musk to visit the state that he governs. The foreign minister culminates a 14-month management led by Undersecretary Martha Delgado and is positioned as a leader on the issue of electric mobility. The verdict of the memes is that AMLO is one of the losers, because in the last days of last week he launched a campaign to veto Nuevo León as a possible headquarters for Tesla. I disagree. The president was clumsy and spoke too much, but he wins anyway because it is good news for Mexico and it will allow him to improve the accounts in a line where his government is owed. Will there be a Tesla effect? Will AMLO have learned a lesson? Will more investments come?
