Upon completion, this will be Tesla’s third factory outside the US. Credit: Blomst / Pixabay.

Tesla has plans to construct a new assembly factory in the northern part of Mexico as part of its move to widen operations outside the US.

This news was announced by Mexico President Andres Manuel Lopez Obrador.

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The facility will be built at Monterrey, a three-hour drive from Texas.

It is not known what models the facility will produce.

According to a Mexican official, the facility would be a Tesla ‘gigafactory’ which could manufacture the Semi truck, Roadster sports car, and possibly other vehicles, reported Reuters.

Another official said the facility might manufacture sport utility vehicles (SUVs).

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Mexican President Obrador said: “This will represent a considerable investment and many, many jobs.”

Earlier, the country had raised concerns about the impact of the water demands from the factory over the region, reported BBC.

Tesla is stated to have committed to the Mexican government to alleviate those concerns.

This would be the firm’s third factory outside the US, after its facilities in China and Germany.

The latest Tesla factory would represent an initial investment of $1bn, which could increase to $10bn over a period, according to an official.

Mexican Deputy Foreign Minister Martha Delgado told Milenio Television that the investment was worth ‘in excess of $5bn’ and that the facility would manufacture around one million vehicles annually.

The latest news of Tesla’s plans comes only a few weeks after BMW announced its plans to invest in a factory in Mexico.

Ford also has a manufacturing facility for its electric SUV in Mexico.

In 2022, General Motors announced plans to construct a plant for electric vehicles in the country.