Tesla Inc's quest to build its first factory in Mexico reveals some of the shaky underpinnings of the country's rise as a nearshoring darling, with proximity to U.S. buyers weighed down by concerns over power supply and political interference.
That puts the Austin, Texas-based company - and any other major investor looking to build factories in Mexico - at the mercy of political forces mostly dictated by Lopez Obrador. The nationalist leader has prioritized Mexico's state power utility, CFE, despite criticism that its fossil fuel turbines pollute and that it crowds out private enterprise.
With its low costs and location next to the U.S. market, Mexico emerged as an attractive alternative that is gradually luring manufacturing in sectors including autos, electronics and furniture. Many deals have landed near Monterrey, Nuevo Leon's wealthy capital, including for Tesla suppliers. Those deals include the first plant outside Asia for Taiwanese electronics company Quanta Computer
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