(Bloomberg) -- Tesla is looking for local parts suppliers in Mexico as it prepares to build its first factory in the country, an official at the company said on Friday.
Eugenio Grandio, who helps oversee the plan to build a factory in the northern Mexican state of Nuevo Leon that will produce a next-generation electric vehicle, said co-founder Elon Musk wants to work with local companies that can grow with Tesla.
“There’s gonna be a lot of possibilities for companies from all over the world coming to Mexico, joining us, and creating also talent that could innovate internally to help us continue growing,” Grandio said during a panel discussion at an event hosted by the Bolsa Mexicana de Valores in Playa del Carmen, Mexico.
Grandio, who previously worked at BMW Group Mexico, said he jumped at the chance to join Tesla when it entered Mexico. “I applied for all the jobs: salesman, technician, whatever, just to get an interview,” he said, adding that he was initially hired to deploy charging stations around the nation.
“I drove a car to Queretaro and almost got stranded. And I said, we need to fix this,” he said. “After two years we had installed 1,500 chargers throughout the country.”
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Tesla’s decision to build a facility in Mexico has been seen as part of the so-called “nearshoring” trend, where companies are seeking to be closer to US consumers and avoid the supply-chain problems they experienced with international shipping in the pandemic.
There are already an “amazing” amount of auto suppliers in Mexico, where nearshoring is colliding with the “radical transformation” of the auto industry, he said. “There are a lot of possibilities where some older suppliers that used to make components for combustion cars will transition to electric.”
Grandio said “the table is set” for a transition to EVs as the US, Europe and China have implemented regulations, such as limits on selling combustion engine vehicles, or tax credits. Latin America “cannot be left behind” and also needs to look at taking similar steps to foster EV adoption, he said.
“These cars are being made, but are not being sold in Mexico,” he said. “We need to step up our regulation.”
Grandio related a story that he said Mexico’s former Foreign Minister Marcelo Ebrard likes to tell about his conversations with Musk during the coronavirus shutdowns. Musk called Ebrard to say how he needed Mexico to allow auto parts suppliers to resume operations in order to be able to restart the Tesla plant in Texas. Ebrard asked for a list of suppliers, expecting there would be at most 10 or 20.
“When he saw that we already had 130 suppliers, he was like caught of guard and said ‘wow,’” Grandio said.
Read more: Tesla Plant Marks Mexico’s Manufacturing Moment: Supply Lines
(Adds official’s comment on nearshoring in paragraph seven. An earlier version corrected the number of chargers in the country in paragraph five.)
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