A Tesla supplier will invest $99 million to build its first plant outside of Asia in the U.S. state of New Mexico, the Taiwanese company said on Wednesday. The company said the factory in Santa Teresa will produce powertrain components for electric vehicles. The investment comes amid a growing emphasis on regional supply chain production and the global auto industry shifts to electric vehicles.
The project is expected to create 350 jobs at the company’s 30-acre site in the Santa Teresa Borderplex industrial park, according to a June 28 state release. Taiwan-headquartered Hota Industrial makes internal combustion engine and electric vehicle powertrain components for North American and European clients, including Tesla. It produces about 20 million automotive transmission gears annually.
Chairman Shen Guorong of Hota Industrial said the company chose New Mexico because it is close to the Mexican border. He added that the state’s workforce was attractive, and there were many benefits, such as lower energy, labor, and materials costs, making the area a great place to invest.
In recent years, New Mexico has been attracting more companies to establish operations at its border region. The state has invested millions of dollars in improvements to roads, highways, and ports of entry, including a $170 million expansion of the Santa Teresa entry near El Paso, Texas.
New Mexico is also seeing an increase in reshoring, the practice of companies bringing some or all of their manufacturing work back to the United States from overseas. In the past two years, the number of commercial trucks processed at Santa Teresa has doubled to more than 160,000 per hour, making it one of the fastest-growing trucking ports in the country.
Several Tesla suppliers have reported that their parts production for the Model 3 sedan is speeding up after earlier delays. Earlier this month, Taiwanese component maker Hota Industrial Mfg. Co (1536. TW) told local media that Tesla had increased the number of orders it needed for parts to 5,000 per week from 3,000.
The company’s decision to invest in a new facility in the United States follows a visit to the region by New Mexico Gov. Michelle Lujan Grisham, who is leading a trade mission to Taiwan this weekend. The trip includes meetings with government and business leaders and a keynote address at the U.S. Business Day conference in Taipei. The state is home to about 100 technology and manufacturing firms that export products to more than 151 countries, according to the International Business Accelerator, which tracks international sales for New Mexico companies.