Mexico president warns that Tesla cannot build plant if water scarce

MEXICO CITY, Mexico: Concerns over water supplies could prove to be a deal-breaker for Tesla’s plans to build a plant in the northern Mexican state of Nuevo Leon.

When asked if he would allow the electric vehicle maker, led by billionaire Elon Musk, to open a plant in Nuevo Leon, Mexican President Andres Manuel Lopez Obrador said, "If there’s no water, no."

"Simply put, we don’t give out permits for that. It’s not feasible," he said, as quoted by Reuters.

His comments mark the strongest sign yet that his concerns over water supplies could become a deal-breaker for Tesla’s plans near the U.S.-Mexico border, underscoring critiques from analysts and investors that interference from Lopez Obrador’s government is undercutting Mexico’s potential as a near-shoring destination serving the U.S. market.

Tesla did not immediately respond to a request for comment.