Mexico would not be able to match the incentives offered under a U.S. act to tame inflation if Tesla Inc builds a battery plant in the country, Mexico’s finance minister said, days after Tesla announced the construction of a “gigafactory” there.
Tesla (TSLA.O) has not confirmed whether it will also build a battery plant in Mexico, but local officials say Tesla has visited the central states of Hidalgo, Queretaro and Puebla to scout potential sites.
A representative for Tesla in Latin America did not immediately respond to a request for comment.
Signed in August, the Inflation Reduction Act offers a $7,500 tax credit to electric-vehicle buyers if the car’s battery meets a threshold for sourcing parts from the U.S. or other free trade partners, such as Mexico.
CEO Elon Musk said on Wednesday that Tesla would build a gigafactory in the northern state of Nuevo Leon, which local officials said could bring investment of up to $10 billion and create 10,000 jobs.
While Mexico welcomed the investment, Tesla said it “did not need any sort of fiscal stimulus” beyond the benefits allowed under Mexico’s free trade agreements to build the plant, according to Ramirez.
A decision on a battery plant in Mexico has yet to be announced.
Without legislation, Ramirez said, Mexico would not be able to match U.S. incentives.