has said he wants to crack down on automakers building cars in Mexico — and that could be a problem for , Trump has floated imposing tariffs higher than 200% on vehicles imported from Mexico, a move analysts told Business Insider could throw the US auto industry into crisis. It's also put a $10 billion new factory proposed by one of his biggest backers in limbo. that it was planning to build its seventh gigafactory near the industrial hub of Monterrey, Mexico.
The project has since been hit by delays and uncertainty, with Elon Musk telling investors earlier this year that it was on pause until the election outcome was clear. "Trump has said that he will put heavy tariffs on vehicles produced in Mexico, so it doesn't make sense to invest a lot in Mexico if that is going to be the case," the Tesla CEO said in July. Musk and could be given a role in his administration.
Trump's victory has pushed Tesla's project even further into purgatory. Mexico's economy minister told local media last week he planned to set up a meeting with Musk to clarify the factory's status. Trump vowed to clamp down on automakers building cars in Mexico on the campaign trail, and the prospect of new tariffs could force US automakers such as Tesla to make some hard choices about operational or planned factories in Mexico.
Investment bank UBS warned that any tariffs on Mexico would be "highly disruptive" to the entire US automotive industry, in an analyst note released after the election. Analysts told BI.