Portugal attempts to attract Tesla factory

  • ECO News
  • 21 November 2016

Portugal is competing with other European countries for the location of a Tesla factory, ECO confirmed. Contacts have already been made between Portugal and the USA.

Portugal is trying to convince Elon Musk, founder of Tesla, to locate a Tesla Motors factory in Portugal. It will not be easy, since on the running are Spain, France, the Netherlands and some Eastern European countries. The news is broken by Spanish newspaper Faro de Vigo, which explains the car and electric batteries manufacturer will decide in 2017 the location of the factory they intend to install in Europe.

The Iberian Peninsula, due to the amount of hours of sun per year, should be among the favorite destinations for receiving this new investment in case the North-American company wants to replicate the photovoltaic factory it has installed on the roof of their other gigafactory being built in Sparks, Nevada”, is written in Faro de Vigo.

Portugal has the advantage of being an important exporter of lithium, holding in the north regions some of the most relevant mines exploring the material essential to the production of the batteries for electric cars. Still, Portugal only produces lithium concentrate, which does not suffice because in order to be used, lithium must go through foundries.

The Portuguese government has had contact with Tesla “which began in the first semester of this year and that have developed now, by the end of the year”, an official source from the Ministry of Economy told ECO. One of the contacts was made by the Undersecretary of State for the Environment, José Mendes, which has met, on September 8, a TESLA Motors high-level delegation, led by Douglas Alfaro and that included the head of the Loading Infrastructures in Europe. One of the topics discussed on the meeting was “the possibility to attract research and development projects from TESLA, using the Portuguese world-class road infrastructure”, revealed the Ministry for the Environment.

These types of negotiations are made through the incentives’ offer from the countries aiming to receive investment. Portugal normally uses Contractual Rules for Investment (RCI) negotiated through the Agency for Foreign Investment and Trade (AICEP) that allow for a mix of offers, which also depend on what the company is aiming to do – how long it is expected to remain in Portugal and how many jobs it is going to create.

According to Faro de Vigo, Tesla has not yet made its decision. The new Tesla facility should manufacture both electric models and li-on batteries. Currently, Elon Musk’s company has a small car assembly center in Tilburg, in the Netherlands, where the units for Tesla Model S are assembled from components that come directly from the United States, from the main factory in Freemont, California.

Galicia vs North of Portugal

In Spain, mainly in Galicia, there is some uneasiness about the investments the North region of Portugal has been able to mobilize to the country, contrary to its Iberian neighbor.

The Spanish newspaper La Voz de Galicia says “Portugal is the country obtaining hundreds of millions in investment”, justifying this with “the proximity and the good communications with the PSA factory in Vigo [Spain] and its Portuguese branch, in Mangualde. In the first semester of the year, Portugal was able to capture 100 million from four car multinationals”.

These investments were made in the North Region of Portugal. The French Eurostyle Systems announced an investment of 18 million euros for two new factories in Viana do Castelo, that by 2019 should have created 100 new jobs; the German Saertex will also invest 3.5 million in a new factory in Viana do Castelo, where the company is already present since 2008; the German Continental has invested 50 million in Vila Nova de Famalicão; the Asian Sakthi has promised to invest 36.7 million euros in Maia; and there are 50 million euros worth of projects in Braga from German Bosch.

Aware of this uneasiness, the Portuguese minister of the Economy Manuel Caldeira Cabral had a meeting in Ponte de Lima, last month, to assure “a win-win situation is created to bring Portugal and Galicia closer together”.

It is not sure the amount Tesla is willing to invest in the new European factory, but in the factory located in Sparks, USA, there was an investment of over five billion dollars, aiming to create 6,500 direct jobs and eleven thousand indirect jobs, according to American press.