Rumor of Tesla Brazil Gigafactory Project Approaching by Government

According to NSC Total, negotiations are beginning, in an attempt to attract the North American automaker of the highest technological level, which has revolutionized the industry in recent years to Brazil with the goal of building a factory. Journalists claim that it is Tesla, although neither the government nor federal deputy Daniel Freitas - an interlocutor of the Ministry of Science and Technology - confirms the name of the automaker.

Freitas only says it is one of the most valuable automakers to be able to open one of its units in South America in three years. On Wednesday, February 12, the deputy met with the Minister of Science and Technology Marcos Pontes to outline a plan for addressing the company. The federal government must demonstrate the benefits that would allow this automaker to come to Brazil. If the American manufacturer is interested in the offer, the government is committed to making efforts to establish a factory in Santa Catarina.

Photo: Tesla

According to the deputy, who is close to Minister Pontes, the intention is to form a Brazilian delegation, which will even be attended by President Jair Bolsonaro, to visit the company's headquarters and present the intention to establish a unit in Brazil.

Freitas is the author of bill 4285/2019, which intends to exempt from IPI (a tax on industrialized products) and from the tax on imported cars that have engines operating exclusively on electric energy. The offer also guarantees tax benefits for electric or hybrid vehicles made in Brazil. It exempts this vehicles from IPI until 2029, as well as batteries made for these vehicles.

In 2018, Tesla CEO Elon Musk tweeted that Brazil is one of his favorite countries and that he is looking forward to being able to bring Tesla cars there.

Can’t wait to bring Tesla to Brazil. One of my favorite countries!

— Elon Musk (@elonmusk) July 31, 2018

In September 2019, it was reported that a California automaker was planning a deal with Sigma Lithium Resources Group, a Brazilian start-up company that could supply companies with lithium, a key component of batteries for electric vehicles. Brazil is in 7th place among the countries with the highest concentration of lithium. A large percentage of the metal used primarily for glass and batteries is available in the Minas Gerais area.

At the moment, these are just rumors. But, if this information turns out to be true, then the Brazilian government really shows a serious intention to cooperate with Tesla.

For the automaker, the construction of a Gigafactory in Brazil will open access to all of South America. In addition to this, Tesla can gain access to cheap labor, lithium, as a key component of batteries and the ability to receive tax breaks on cars produced in the country.

Featured image: Tesmanian

Thanks to @alexcatrey for the help in collecting data for the article