A Tesla factory in Mexico? Elon Musk meets with Nuevo Leon state officials, reports say

Tesla Inc. CEO Elon Musk's appearance over the weekend in the northern Mexico state of Nuevo Leon has sparked local speculation that Mexico could be a candidate for future Tesla investment.

Musk wants the automaker to scale "to extreme size," and new factory announcements are possible by the end of the year.

The Milenio newspaper, which published a photo of Musk standing on an outside patio with Nuevo Leon first lady Mariana Rodriguez, reported Sunday that the tech billionaire met with Gov. Samuel Garcia and local economic development officials "to analyze the possibility of installing a Tesla plant."

Milenio, citing anonymous sources, said the officials are proposing a manufacturing facility in the municipality of Santa Catarina, near the state capital of Monterrey.

Tesla did not immediately respond to a request for comment. Mexican media said state officials did not comment on the meeting.

Other Mexican media suggested the talks with local officials could be focused on creating a Tesla parts assembly corridor in the state for export or expanding relationships with local parts suppliers.

Tesla has a new plant in Austin, Texas, that could be easily fed from northern Mexico.

Loo celebrated the establishment of a new Spirit Airlines direct flight between Austin and Monterrey on his Twitter account on Oct. 6.

The state of Nuevo Leon also has established a dedicated traffic lane for Tesla suppliers at the Colombia border bridge checkpoint, Bloomberg reported in July. Tesla suppliers in Mexico include France's Forvia and Germany's ZF.

"For some analysts, the visit of Elon to Mexico is a sign that the commercial agreements are on the right track, since a personal visit would indicate a high level of interest in the country," the Infobae news service said Sunday.

The Texas-Mexico border area is home to hundreds of auto parts manufacturers, along with a major General Motors plant in Ramos Arizpe, Coahuila, and a sprawling Kia Corp. plant just outside Monterrey. The GM plant is retooling to make its first electric vehicles.

Mexican financial newspaper El Economista reported in April that Garcia, the Nuevo Leon governor, visited Tesla's Austin plant to cement an agreement for parts suppliers to use the Colombia bridge for exports to Tesla plants in California and Texas.

Last year, Mexico exported just over 2.7 million vehicles, mostly to the U.S.

As the North American auto industry shifts from combustion vehicles to EVs, Mexico is seeking to draw more EV assembly and parts investment. Ford currently makes the electric Mustang Mach-E at a factory near Mexico City.

Chinese battery supplier CATL has also been considering opening a plant in Mexico since earlier in the year, but Reuters has reported that the company has slowed its investment plan more recently on concerns over how new U.S. rules on battery sourcing will increase costs.