Mexican President Andres Manuel Lopez Obrador announced on Tuesday that electric automaker Tesla would be building a new plant in the north of the country.

Mexican President Andres Manuel Lopez Obrador announced on Tuesday that electric automaker Tesla would be building a new plant in the north of the country.

The factory will be in the city of Monterrey, in the state of Nuevo Leon, ending speculation over which state would be awarded the factory after several vyed for the opportunity.

Following a phone call with Tesla Chief Executive Elon Musk on Tuesday, Lopez Obrador revealed that the plant would be located in the industrial hub of Monterrey, the capital of the northeast state of Nuevo León.

"This will represent a considerable investment and many, many jobs," Lopez Obrador said. He added that CEO Elon Musk had been receptive to Mexico's environmental concerns, such as the fear that the project would exacerbate water scarcity in the region.

Lopez Obrador's office had hinted at the deal earlier in the week, reporting on at least two phone calls between the president and Musk.

Further details of the project are expected to come on Wednesday, when Musk will hold an "Investor Day" and unveil what he calls his "Master Plan Part Three."

Foreign investment in Mexico reached its highest level in years in 2022, utilizing the country's skilled work force and relatively lower wages to make it a global hub for the auto industry.

However, some investors remain timid to get involved in the country due to Lopez Obrador's plan to strengthen state control of the energy market and restrict the role of private capital.

The bulk of Tesla's manufacturing capacity and its workforce is in the US, but the carmaker also has various facilities in the Netherlands, Germany, Canada and China