Amid changing global dynamics spurred by persistent COVID-19 disruptions and the U.S.-China trade war, Tesla (TSLA) supplier Hota Industrial has chosen to enhance its footprint in the US. Set to pour $99 million into its inaugural plant outside Asia, situated in New Mexico, Hota envisages initiating construction early next year with mass production slated to commence in 2025. This strategic move comes as the company adapts to the evolving paradigm of regional production in supply chains, positioning itself closer to its North American clientele which constitutes 60% of its sales, and tapping into the burgeoning U.S. electric vehicle (EV) sector.
David Shen, Chairman of Hota, underscored the renewed emphasis on a deeper U.S. investment, facilitated by the conducive infrastructure and manufacturing prowess already in place in New Mexico. In a post-announcement dialogue with Reuters, the state's Governor, Michelle Lujan Grisham, emphasized the mutual benefits of this collaboration, highlighting the state's readiness to accommodate the demands of Taiwanese firms and leverage their manufacturing expertise. The strategic move has also garnered support from the state in the form of a $3 million funding injection, coupled with potential prospects for further tax credits.
Echoing New Mexico's allure for foreign investments, the neighboring state of Arizona is hosting Taiwanese chipmaker Taiwan Semiconductor Manufacturing Company (TSM), which has pledged an enormous $40 billion to erect two chip factories. This investment not only marks one of the grandest foreign direct investments in U.S history but also aligns perfectly with Washington's aspiration to amplify domestic chip production.
Complementing these developments, James Huang, Chairman of the Taiwan External Trade Development Council, projected that the focus on electric vehicles would amplify in bilateral trade, especially in New Mexico. Huang foresees New Mexico transforming into a pivotal hub in the U.S. electric vehicle supply chain, predicting a broad-reaching impact stemming from these bilateral investments between Taiwan and the U.S. This intricate network of investments fortifies the presence of prominent automakers like Tesla, GM (GMF), and Ford (F) in the region, further embedding the mutual economic growth and collaboration between Taiwan and the U.S.
