Mexico’s president, Andres Manuel Lopez Obrador, has announced that Tesla will build a new production facility in Monterrey, Mexico. According to the Associated Press, Lopez Obrador was hesitant to give his approval to a factory in that region since it suffers from water shortages. Tesla head Elon Musk assured Lopez Obrador that the facility would only use recycled water.
Reuters is reporting that Tesla’s investment will be over $5 billion and that the facility will produce approximately one million vehicles a year. Although it was not specified what will be produced at the plant, Fortune is speculating that it will probably include vehicle assembly and painting, based on concerns over water. This will be Tesla’s fifth manufacturing facility, the third outside of the U.S.