Tesla is expanding its manufacturing base to Mexico.
Last week, the electric vehicle (EV) manufacturer announced it will build a factory in Nuevo Leon, a northern Mexican state that borders Texas, according to Reuters.
The factory will be built on a 4,200-acre site, spanning twice the size of Tesla’s Giga Factory in Austin.
Construction is set to begin in three months, a Mexican official said on Thursday, per Reuters.
Jesus Nava, mayor of Santa Catarina in Nuevo Leon, told Reuters that Tesla is buying the land from private owners. It measures over twice the size of Mexico City’s International Airport, according to Reuters.
The vehicles that will be produced at the new factory will be announced when Tesla breaks ground on the site in three months, Reuters reported.
To start, Tesla will spend $5 billion and hire 5,000 workers, but Nava said it will ultimately spend $10 billion on the project and hire up to 10,000 employees, according to the Los Angeles Times.
“This will bring a great economic spillover,” Nava said, adding that auto industry suppliers have begun expanding their presence in the area, as reported by Reuters.
Mexico said the new factory will be the world’s largest electric vehicle plant, according to CNBC.
The factory will be built just a few hours south of the U.S.-Mexico border in Santa Catarina, roughly 10 miles from Nuevo Leon’s capital, Monterrey.
The new factory would manufacture one million cars per year, which would make up a third of Tesla’s global output, according to Reuters.
The plant is one step toward Tesla’s new goal to become the world’s largest automaker by volume, the company said on Wednesday.
Before the announcement, there were fears that a plant in Nuevo Leon would not come to fruition if it meant insufficient water would be available for the desert region. A severe drought accelerated that doubt.
“It was never at risk … it added an extra factor for executives when making a decision,” said Nava, according to Reuters.
Tesla utilizes recycled water and uses only minimal liters of water per second, Nava added.