Road Infrastructure Needed to Exploit Tesla Gigafactory Potential
The announcement that the Tesla Gigafactory is to be constructed in Santa Catarina, Nuevo Leon drew the attention of the automotive and other industries, all of which believe they can harness this investment to their own benefit. However, some experts believe the current infrastructure may not be sufficient to keep up with the expansion Tesla will bring to the country’s industry.
Máximo Vedoya, CEO, Ternium, said that the gigafactory will boost the manufacturing sector in the country, a situation that could also be beneficial for SMEs as they could become suppliers. He added that the steel industry is also ready to be a supplier for Tesla. “[Ternium] is already Tesla’s supplier and we hope to also be a partner for the new factory in Mexico,” Vedoya said.
However, Vedoya warned that to keep up with the region’s dynamism, infrastructure should be developed further. “We must solve infrastructure and energy issues; these two factors are key to exploiting this new opportunity,” he added.
Armando Garza, Chair of the Board of Directors, Alfa, agreed with Vedoya and added that it is essential to develop road infrastructure and expand it if more industries move to Mexico’s north.
The area where the gigafactory will be constructed is known as the Salida a Saltillo, on the Saltillo-Monterrey federal highway, which connects the Pacific Ocean with the Gulf of Mexico, connecting the states of Sinaloa, Durango, Coahuila, Nuevo Leon and Tamaulipas. The gigafactory is also located on a junction with Monterey’s peripheral highway connecting with Monterrey International Airport. It is also close to northern Mexico’s largest CFE substation, which the Governor of Nuevo Leon qualified as a great advantage for Tesla as its energy supply will be assured.
The lack of appropriate road infrastructure is a persistent problem for Mexico. On Mar. 16, 2022, the Railroad Transportation Agency (ARTF) pointed out that one of the main characteristics of Mexico is the lack of synergies between road, rail and maritime transportation, which the agency considers a barrier to attract foreign direct investment (FDI). ARTF said Mexico did not have sufficient infrastructure to handle the demand brought by the USCMA. Therefore, increases in logistic costs range between 14% to 35% of the final product value of all goods transported while the OECD average is 8%, according to the Interamerican Development Bank (IDB).