Connect with us

News

Elon Musk’s Next Move Could Bring Tesla Plant to Mexico

Published

on

Image for article titled Elon Musk's Next Move Could Bring Tesla Plant to Mexico

Photo: Suzanne Cordeiro/AFP (Getty Images)

Tesla is very interested in Northern Mexico, General Motors has some good news, and Kia amazingly has not left Russia yet, apparently. All that and more in this edition of The Morning Shift for Tuesday, October 25, 2022.

1st Gear: Making Moves in Mexico

Tesla CEO Elon Musk was spotted in Nuevo León, Mexico over the weekend, fueling rumors that he’ll choose the region for Tesla’s next North American plant. You may recall that the Colombia border crossing in Nuevo León got its very own Tesla lane in July, so the company’s cargo could enjoy easy ingress and egress. In retrospect, maybe that should have been a more obvious tell.

Reuters cited two people with knowledge of the matter that Musk is considering investing in the region in some capacity, having discussed these matters with local officials. Whether that’s a full factory or an effort to bolster suppliers in northern Mexico remains to be seen. Maybe both! From Reuters:

Musk recently held a meeting in the state with Nuevo Leon Governor Samuel Garcia along with other local officials and Ken Salazar, the U.S. ambassador to Mexico, one of the sources said.

Musk is looking in particular at Santa Catarina, a municipality on the outskirts of state capital Monterrey, one of Mexico’s biggest and wealthiest cities, the person added. The sources did not detail what Musk’s potential investment may entail.

A spokesperson for the Nuevo Leon government declined to comment. Neither Tesla, the U.S. embassy, nor a representative for Santa Catarina immediately responded to requests for comment.

Musk’s visit to Nuevo Leon was originally reported by Mexican media. Several outlets published photos of Musk apparently from the visit, including one in which he appears with Garcia’s wife, Mariana Rodriguez.

Garcia posted several of the media articles on his Instagram account, in one case tagging Rodriguez’s account and writing, “Look, look,” without further comment.

This is not the first time Musk has chatted business with Nuevo León Governor Samuel Garcia. In April, just before the border crossing deal was struck, Garcia paid Musk a visit at the Austin Gigafactory, according to Mexican newspaper La Verdad. The prior August, the then-Governor-elect had a Zoom call with Musk and company. This has been a long time coming, and it’s happening at a time when auto manufacturing investments in Mexico happen to be soaring, with an eye toward — you guessed it — EVs. From Automotive News:

The Texas-Mexico border area is home to hundreds of auto parts manufacturers, along with a major General Motors plant in Ramos Arizpe, Coahuila, and a sprawling Kia Corp. plant just outside Monterrey. The GM plant is retooling to make its first electric vehicles.

[…]

Last year, Mexico exported just over 2.7 million vehicles, mostly to the U.S.

As the North American auto industry shifts from combustion vehicles to EVs, Mexico is seeking to draw more EV assembly and parts investment. Ford currently makes the electric Mustang Mach-E at a factory near Mexico City.

Chinese battery supplier CATL has also been considering opening a plant in Mexico since earlier in the year, but Reuters has reported that the company has slowed its investment plan more recently on concerns over how new U.S. rules on battery sourcing will increase costs.

EV batteries will have to be composed of at least 50 percent North American-origin content by 2024 and 100 percent by 2028, so CATL will probably follow through with that plant one way or another. Tesla, too.

2nd Gear: General Motors

GM had good news to share on Tuesday, reporting a 37 percent boost to net income in the third quarter, thanks to selling many more cars over the financial period. Courtesy Automotive News:

GM’s global revenue rose 56 percent to $41.9 billion in the quarter ended Sept. 30. Adjusted earnings before interest and taxes rose 47 percent to $4.3 billion.

The automaker’s net margin slid to 7.9 percent from 9 percent a year earlier.

GM earned $3.9 billion in North America before interest and taxes, an 83 percent increase. Its North American adjusted margin rose to 11.2 percent from 10.3 percent.

“We’re delivering on our commitments and affirming our full-year guidance despite a challenging environment because demand continues to be strong for GM products and we are actively managing the headwinds we face,” GM CEO Mary Barra said in a letter to shareholders Tuesday.

GM shares rose 3.4 percent to $36.95 in premarket trading.

GM confirmed its previous full-year guidance of $9.6 billion to $11.2 billion in net income and adjusted EBIT of $13 billion to $15 billion.

GM said its U.S. dealers had 359,000 vehicles in inventory at the end of the third quarter, nearly triple the number they had a year ago.

That last point is also a good indicator that the ongoing supply chain snags have started to ease up, so you’ll see plenty more Silverados and Blazers on dealer lots. Of course, whether you’re able to afford them is another story entirely.

3rd Gear: Nio

Nio is one of the leading forces in China’s EV boom, and probably the best startup poised to make a global splash. That’s not news, exactly, but if you ever suspected CEO William Li might be concerned about all that domestic competition, he’s not. From a recent interview with Automobilwoche, syndicated by Automotive News Europe:

Nio founder William Li said the number of Chinese automakers with “a real product” is between 20 and 30. Li said these include companies such as Geely and SAIC, which he says have established electric brands.

“All this competition is good because it moves the industry forward,” Li said in an interview with Automotive News Europe sister publication Automobilwoche.

“You have a lot of great automakers in Europe. Even in China, Mercedes, BMW, Audi, and the others are tough competitors. We still have a long way to go to be that strong,” Li said.

The automotive industry is currently one of the “most open markets” there is and if Nio can survive in China, it has the chance to be competitive in other markets, he said.

Also, Nio’s moving very, very fast:

“We are on track [to profitability],” he said. “Tesla took 16 years. We do not need 16 years.”

I suppose you wouldn’t openly discuss the offhand possibility of starting another, maybe two sub-brands if your company wasn’t maturing at that rapid a pace.

4th Gear: Kia and Russia

Many auto brands left Russia in 2022, and Kia may well be the next. From Automotive News, once again:

Kia Corp. sees volatility rising in Russia with the prolonged war in Ukraine, and in a worst-case scenario, may shutter its business entirely, an executive said Tuesday.

“If you ask me one negative factor for sales, I would say volatility in Russia may accelerate next year and the automobile market itself may completely shut down for a while,” Woo-Jeong Joo, Kia’s executive vice president, said during an earnings call. “We may consider doing an after-service business only, because we basically can’t supply cars there.”

Kia’s sales in Russia plunged almost 65 percent this year through September with about 57,000 cars delivered in the nation versus a 4.1 percent decline in sales globally.

Kia makes cars in Russia at a plant in St. Petersburg run by affiliate Hyundai Motor. The facility has an annual capacity of 200,000 cars and employs some 2,200 workers, according to Hyundai’s website.

Honestly, I’m surprised they’re still there. The bidding will probably start at one ruble.

5th Gear: The Fiesta’s Over

First, Ford killed all its passenger cars in the U.S. Then it killed the Mondeo in the U.K. — where it mattered — and, eventually, the world. Now, we’re staring at a Europe without the Focus and Fiesta. Rumor has it the latter will not survive in the U.K. through 2023. Per Auto Express:

Auto Express understands that an official statement with news of the Fiesta’s demise – as well as plans that outline when the Blue Oval’s iconic supermini will go off sale, possibly by the middle of 2023 – could come in days as Ford’s march towards full electrification continues.

Auto Express contacted Ford for comment and was told: “We are accelerating our efforts to go all-in on electrification and therefore review our vehicle portfolio in line with our business strategy. We do not comment on speculation and will share more information in the coming months.”

Anyone who has been observing the slow death of small cars beyond our shores will not be surprised by this. Basically, tightening EU emissions regulations necessitate controls that cut into the already slim profit margins of cheap cars. Also, battery-electric vehicles are not yet cheap enough to build and sell for affordable prices. The result is closing the window on a once critical segment, and, well, excess: excess in consumption, excess in corporate profits, excess in consumerism. Also, an increased chance you’ll be seriously hurt or die if you don’t buy something new and large. Sure, I’m biased, but this still sucks.

Reverse: Another Great Tokyo Motor Show

Image for article titled Elon Musk's Next Move Could Bring Tesla Plant to Mexico

On this day in 1962 — 60 years ago — the 9th running of the Tokyo Motor Show opened, according to 365 Days of Motoring. There, attendants were treated to many delightful vehicles, including the Honda Sports 360 you see above. I love everything about it, especially the wheels and that old-school Honda emblem on the fender. The brand should bring it back.

Neutral: New Problem

Yesterday, I was refilling my car after I ran it pretty close to empty. Afterward, the engine was stuttering a lot, and seemed to get pretty close to stalling. This has been weirdly common as of late, though the revs had never dropped quite so low before. The Fiesta ST has a capless gas tank, where it can apparently help to leave the pump in for another 30 seconds. I didn’t know this! Also, it apparently doesn’t love to be topped off. I’m not the only person with this issue, which is always encouraging to see. I’m also long past warranty, so hopefully one of these small adjustments will prove helpful.

Continue Reading

Recent News

Boiler Boiler
Guide10 hours ago

When Is the Best Time to Replace a Boiler?

A boiler is a workhorse that works around the clock. It provides heat and warm water whenever needed. While horses...

Grammar Grammar
Tech17 hours ago

Grammar Checkers Unleashed: Enhancing Writing Precision and Efficiency

In the present computerized age, the ascent of simulated intelligence innovation has presented new difficulties in regards to the genuineness...

Crypto Staking Crypto Staking
Crypto5 days ago

Is it Possible To Make Money On Crypto Staking in 2024?

In the modern world, cryptocurrencies and blockchain technologies are becoming increasingly popular, attracting the attention of investors and users from...

Lake Como Lake Como
Wedding5 days ago

How to Choose the Right Location for a Marriage Proposal in Italy and Lake Como

Proposing marriage is a unique and memorable moment in a couple’s life. Choosing the right location is crucial to creating...

Personal Injury Lawyer Personal Injury Lawyer
Law1 week ago

Finding the Best Personal Injury Lawyer in Lumberton, NC

Personal injury law is designed to protect individuals who have been harmed due to the negligence or wrongful actions of...

WhatsApp Business WhatsApp Business
Business1 week ago

Running WhatsApp Business with Pro+VPS for Android Emulator

WhatsApp Business is one of the most powerful tool for Business to manage customers communication. Running it can enhance the...

Civil Partnership Visa Civil Partnership Visa
Finance1 week ago

Civil Partnership Visa vs Spouse Visa: Which One is Right for You

Choosing the right visa to join your partner in the UK can be confusing. Two common options are the Civil...

Crypto Crypto
Crypto2 weeks ago

Staked Crypto – A Step-by-Step Guide for Beginners

Ethereum staking has become an increasingly popular way for cryptocurrency holders to earn passive income through staking rewards. In this...

Ethereum Staking Ethereum Staking
Crypto2 weeks ago

Maximizing Ethereum Staking Rewards: Tips and Tricks

Are you looking to maximize the potential of your Ethereum holdings? Stake Ethereum using OkayCoin and take advantage of the...

Wedding Wedding
Wedding2 weeks ago

4 Wedding Services You Can Quickly Check Off Your To-Do List

Organizing a wedding might like arranging a large-scale symphony, in which each element must work together to produce a beautiful...