Elon Musk’s Big Tesla Factory in Mexico Taps Chinese Suppliers, Stoking DC Fears

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(Bloomberg) — On the outskirts of Monterrey, Mexico, Chinese auto-parts makers are rapidly setting up plants to supply Tesla Inc.’s next factory. They join the ranks of Chinese manufacturers that opened Mexican facilities in response to Trump-era tariffs — and this new surge has set off alarm bells in Washington.

Chief Executive Officer Elon Musk invited Chinese suppliers to Mexico to replicate the local supply chain at Tesla’s Shanghai plant, according to people with knowledge of the situation. The company plans to build a cheaper next-generation electric vehicle at a massive facility in the state of Nuevo Leon, helped in part by $153 million in local government incentives.