You are making very valid points. There is zero doubt that Brazilian workers can be excellent and that large numbers of that exist from Embraer, Stellantis, GM, CAOA (Hyundai, Chery) to medical research (two leaders in vaccine development, and so on. I can list the positives for hours!@unk45 : Re Brazil workforce that is interesting, especially as it differs from my personal observation. I am used to visiting clients' in Brazil, at their factories that range from mid-tech to high-tech. My observation has been that whilst there is a lot of competition for skilled workforce, so too is there sufficiency of supply coming through the system. I'm also used to Brazilian made vehicles all over Mercosur. In Mercosur at present I cannot envisage anyone putting an automotive factory in Argentina until they have proved they can run a stable political and economic system for at least a decade (which is to say, never). Which really only leaves Brazil as a viable choice. In my opinion there is a sufficient market to absorb two lines of product (a 3 and a Y line) which gives time for the 2/Z, and the van products to become available, both of which would be sufficient to take a Brazil-based factory to 2m/yr or so.
@MP3Mike : However you make a very valid point re the unproven nature of the Brazil market wrt Tesla. There is no Tesla Supercharger network or sales & service network in Brazil.
Given this, if Tesla are seeking focus then the obvious choices are either USA, EU, or China. However if Tesla are seeking some form of further diversification at this stage then there are only three other countries that meet the tests of being a proven & sufficient market* with existing Tesla networks: Mexico, South Korea, Japan. So really that gives Tesla six candidate areas to choose from depending on how Tesla prioritises the various factors in their selection mix. I am unsure of the extent to which Mexico has any better access into Mercosur though, as a way of testing/developing the Brazil market - didn't the 2002 FTA process run into quicksand ? Can anyone comment knowledgeably on that ?
Which is to say that a lot of people will be taking a keen interest in the movements of Tesla senior management team over the next six months.
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* I exclude Australia due to it probably being an insufficient market, and Turkey is a basket case right now under the madness of Erdogan (besides which, if you zoom in on the red dots in Turkey, they turn a disappointing grey).
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That even ignores superb restaurants and many other things that make quality of life for the well-educated and well-off very high. Even medical access is far better than in my other country.
But…government malfunction is threatening all that, much of which has been built using the Federal university system. That is threatening all the advances of recent decades.
As for EV infrastructure, it is advancing quickly, not too visible because Brazil,is the size of the continental US. The growth of BEV adoption is high, but from a tiny base. Among my community there are numerous BEV now, none a year ago. There is a new Model Y in my nephews building. Most new residential buildings have EV charging and feature that in promotions. Solar and wind power are growing rapidly, as is battery storage (almost all Chinese with BYD leading the high end). Right now the high end of the market is thriving with Porsche leading the pack.
Strangely, perhaps, ultra-right politicians advised by, among others, Steve Bannon, is increasing political divisions in Argentina, Chile and Brazil even Uruguay. Mercosur is in serious disarray. Skipping details (relevant but OT) cohesive policy for industry is not present.
At the moment Chinese company are the only ones which have navigated all that successfully.
The most serious is, though, is scale. There is not enough scale in Mercosur to support a gigafactory (1.5-2 million annually). Exports could help (Mercedes has exported some trucks and cars to the US) but none do now. Ford gave up factories here, after a century building vehicles here. GM does well, mostly with Korean-developed models.
Here, though, is the fundamental, intractable problem:
New vehicle sales grow 0.22% in Brazil
From January to June 2022, sales totaled 683,173 units, 15.04 percent less than recorded in the same period last year (804,141). The data were released by Fenabrave.
agenciabrasil.ebc.com.br
My past enthusiasm was built on the idea that Tesla would build smaller factories for smaller markets. Elon clearly indicated that approach is not planned today. We’re they to build a, say, 300,000 annual capacity plant, build Gigapack, Megapack, and Superchargers galore, that could work very well. If Tesla could scale the bureaucracy (probably could, both Bolsonaro and Lula make pro-Tesla sounds) Tesla could build solar/wind powered Superchargers nationwide so power, profitably, all those BEV trucks, busses and cars that everyone else is beginning to make. Vale is right here to help supply almost all the needs for raw materials.
All that is plausible. However, the world has rather larger and easier places to serve first.
I, of all people, strongly dislike my opinion. Facts are intractable, I don’t like them, but cannot deny them.
