Despite reluctance to take on the step due to the drought in the region, Mexican President Andres Manuel Lopez Obrador confirmed on Tuesday that Tesla will open a plant in northern Mexico for Tesla. The announcement was made following a call he had with Tesla's CEO, Elon Musk.

President Lopez Obrador mentioned on Monday that he will have a call with the CEO of the electric car company to discuss possible investments. 

Rumors surged regarding the call up until Lopez Obrador confirmed the news the next day during a news conference.

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"They are going to dedicate the investment to Mexico, and they are going to establish the plant in Monterrey with a series of commitments to address the problem of water scarcity, they are going to help," he said. 

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The president added that due to the drought and water shortage in Monterry, the plant would not open there. Instead, he pushed for the plant's construction in the central city of Hidalgo, closer to the newly inaugurated International Airport. 

However, following critics who said that the water supply in Monterrey hoarded significant amounts of the city's water supply, Lopez Obrador confirmed that Tesla will begin construction in Monterrey. 

Mexico announced that it would not grant subsidies to Tesla, as opposed to other US billion-dollar companies.

The Mexican president thanked Musk for investing in his country and most importantly using Mexican workers.

​​​​​​​"We agree that the primary resource of Mexico is the quality of its workers, the ethics, the responsibility, the creativity of the Mexican workers, and (Elon Musk) fully agreed that is not found in other places in the world, the quality of the labor force, the professionalism, the responsibility of the Mexican workers," he added.

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