Electric vehicle maker Tesla may reconsider plans to build a gigafactory in Mexico’s northern state of Nuevo León amid concerns over power supply from state-owned CFE.

Negotiations between the American firm and CFE ran into difficulties due to the public company’s inability to fully supply the plant, in addition to its rejection of Tesla’s proposal to buy electricity directly from a private supplier, reports the Mexican press, citing the United States. sources familiar with the talks.

Reports that Tesla was considering building a factory in Nuevo León, a plan the company was due to unveil this quarter, date back to late last year. Its chief executive, Elon Musk, reportedly visited Nuevo León twice last year to learn about plant location options.

Tesla is looking for a new factory location in countries like Indonesia, South Korea and Canada. In December, he reportedly chose northern Mexico after holding talks with authorities in Nuevo León, although no official announcement was made.

Rumors even swirled that the Mexican government was trying to persuade Tesla to move the gigafactory from Nuevo León to Mexico State (Edomex), near the capital, although corroborating evidence has yet to be produced.

Tony Payan, head of the Center for the United States and Mexico at Rice University’s Baker Institute, said on his Twitter account that the Mexican government had asked CFE to deny electricity to Tesla near Monterrey. in order to make her withdraw. this city but for Edomex in a political maneuver during the election season.

The comment was echoed by Víctor Pérez, a senator from the center-right PAN party, who criticized what he described as the government’s intention to move the plant from Nuevo León to the outskirts of Mexico City.

Mexico City Mayor Claudia Sheinbaum is a close ally of President Andrés Manuel López Obrador and is currently leading the polls to become Mexico’s president in the 2024 election.

On Tuesday, government spokesman Jesús Ramírez said Tesla planned to open an assembly plant near Felipe Ángeles International Airport, in Edomex, and would focus on exports, Reuters reported. .

It is unclear whether Ramírez’s comments refer to another factory or to the project originally planned for Nuevo León.

Despite the rumours, the alleged aversion of the CFE to the supply of electricity between private companies is perfectly in line with the position of the current administration. The company, in collaboration with the regulator CRE and the network control center Cenace, has made it a priority to ensure that private consumers sign a supply contract with the public company.

Some private power plants in Nuevo León, such as Iberdrola’s Dulces Nombres, have been closed and not allowed to resume operations due to permit issues.