(JW Insights) Oct 20 -- Two Chinese suppliers of Tesla will invest almost $1 billion in the northern Mexican state of Nuevo León, where the US automaker is planning to build a new plant, Governor Samuel Garcia said on October 18 during a visit to Shanghai, Yicai Global reported.

The suppliers are Ningbo Tuopu Group, which produces shock absorbers and other parts, and Shanghai-based Hesai Technology, which makes lidar sensors for autonomous vehicles. Tuopu will invest $700 million and Hesai $260 million, Yicai learned, though neither firm has yet commented on their investment plans.

Tesla’s planned plant in Monterrey, the capital of Nuevo León, is likely to be two times the size of its gigafactory in Austin, Texas, Garcia said, adding that the California-based carmaker has already bought batteries, software, computers, and other parts in the state.

Situated in northeastern Mexico, Nuevo León is known for its key contribution to the country's automotive industry. The state hosts a number major vehicle production plants and assembly lines, operated by domestic and foreign companies, turning out a wide range of vehicles from compact cars to heavy trucks.

The timeframe for Tesla’s Monterrey plant is unclear, but Tesla chief executive Elon Musk said on October18 that he hopes to have a clear picture of the global economic situation before construction begins. Speaking on a third-quarter earnings conference call, Musk stressed that cutting costs will be Tesla's top priority next year, both in terms of engineering and plant operation, said the Yicai Global report.

(Yuan XY/Gao J)