Tesla has put its Mexico Gigafactory plans on hold because of tariff threats from former President Trump. Instead, Tesla is focusing on increasing production capacity at its existing factories.
During an earnings call on Tuesday, CEO Elon Musk announced that constructing a new Gigafactory in Mexico would pause until after the US presidential elections. This decision stems from Trump’s promise to impose taxes on cars made in Mexico.
“We’re currently on pause on Giga Mexico,” Musk stated. “We need to see where things stand after the election.”
Musk explained, “Trump has said he will put heavy tariffs on vehicles produced in Mexico. It doesn’t make sense to invest a lot in Mexico if that happens. So, we will see how things play out politically,” Fox Business reported.
Musk has not yet revealed the types of vehicles planned for production at the Mexico factory. The company is now more focused on increasing production capacity at existing factories, including for the forthcoming Robotaxi and its Optimus robots.
“We are significantly increasing capacity at our existing factories,” Musk added. The Robotaxi will be produced here at our headquarters in Giga, Texas, as well as Optimus, which will be produced here in Texas towards the end of next year for version two—the high-volume version of Optimus will also be produced here in Texas.
In the March campaign, Trump stated he would impose a 100% tariff on vehicles made by Chinese automobiles in Mexico for import into the US.
“We’re going to put a 100% tariff on every single car that comes across the line, and you’re not going to be able to sell those guys if I get elected,” he said.
He reiterated this statement during his speech last week at the Republican National Convention.
Musk’s decision aims to establish a presence in the North American market in a region where no Chinese automakers have production facilities.
