Mexico and Tesla are close to reaching an investment agreement after sources call the president

MEXICO CITY (Reuters) – Mexico and Tesla Inc. (TSLA.O) are close to announcing a deal on the electric car maker’s plans to invest in Mexico after President Andres Manuel Lopez Obrador and Tesla CEO Elon Musk spoke on Monday. Mexican officials said.

Lopez Obrador earlier revealed that he would be speaking with the Tesla “owner,” which officials confirmed meant Musk.

An official said after a call Monday that Tesla will be coming to Mexico. A second official said the two sides were “90 percent” of the way toward reaching an agreement.

“The call went really well,” said a third Mexican official.

A fourth Mexican official said details of an agreement between Mexico and Tesla will be revealed on Tuesday.

Tesla did not respond to a request for comment.

The call was announced after Lopez Obrador said on Friday that Tesla would deny permits to build a factory in the northern state of Nuevo Leon, where the company is considering investing, if water is scarce in the arid region.

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Two of the officials said Musk and Lopez Obrador did speak on Saturday. One official said Monday’s call lasted about 40 minutes and Saturday’s took about 35 minutes.

Lopez Obrador’s office did not respond to a request for comment.

The Tesla discussions became a major test of whether López Obrador could set terms for major investments in Mexico in pursuing a policy of resource nationalization that has continually aroused suspicion among business groups.

Remarks from leftist López Obrador last week were the strongest signal yet that his concerns about water supplies could turn into a deal for Tesla’s plans in Nuevo Leon, an opposition-run state on the US-Mexico border.

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After a call Monday, an official said Nuevo León was still in operation. Mexico’s government has also said the company is considering investing near the new Mexico City airport.

(Covering) By Dave Graham and Diego Orr in Mexico City Editing by Brendan O’Boyle and Matthew Lewis

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