Hota Industrial Mfg. Co (1536.TW), a Tesla supplier, announced on Wednesday that it would invest $99 million to develop its first facility outside of Asia in the U.S. state of New Mexico, citing a stronger focus on local production in supply chains.
Construction on the factory in Santa Teresa, close to the U.S.-Mexico border, is expected to start early next year, with mass production beginning in 2025, according to Hota, a Taiwanese company that primarily produces gears and other car components.
Chairman David Shen stated at a news conference in Taipei on Wednesday that “three years of COVID-19 and the U.S.-China trade war changing globalisation and creating regional supply chains, we restarted our thinking about going to the United States to make a deeper investment.”
According to Shen, other important factors were being close to North American clients, who account for 60% of Hota’s sales, and the thriving electric vehicle (EV) market in the United States.
The announcement’s follow-up interview with New Mexico Governor Michelle Lujan Grisham was conducted by Reuters. “We have the right infrastructure to meet the growing demands of Taiwanese companies, and their manufacturing expertise is very beneficial because we don’t start it from scratch,” she said.
Shen’s nickname in Taiwan was “the Gear King,” and she said, “We can’t compete with him.”
With the potential for extra tax incentives, the state will contribute $3 million toward the project.
One of the largest foreign direct investments in American history, Taiwanese chipmaker TSMC (2330.TW) has pledged $40 billion to develop two chip facilities right next door in Arizona, assisting Washington’s aspirations to increase domestic chip production.
Ford (F.N), GM (GM.N), and Tesla (TSLA.O) depend on Hota as a major supplier.
EVs will be a key area of concentration for bilateral trade, particularly in New Mexico, according to James Huang, head of the Taiwan External Trade Development Council.
The impact of these investments between Taiwan and the United States will be extensive in the future, Huang said on the sidelines of a U.S.-Taiwan business summit on Tuesday. “New Mexico will become a very important stronghold for the U.S. electric vehicle supply chain,” Huang added.
Previously, the Wall Street Journal claimed that Saudi Arabia is in preliminary discussions with American electric carmaker Tesla to establish a manufacturing facility in the country. The report was based on persons familiar with the situation.
According to the article, Saudi Arabia has been courting Tesla with the ability to buy specified quantities of the metals and minerals the firm requires for its electric vehicles from nations like the Democratic Republic of the Congo.
