German automaker Audi will invest 1 billion euros (US $1.08 billion) in electric vehicle production in the state of Puebla, which was announced by Governor Sergio Salomón and company representatives on Tuesday.

Tarek Mashour, president of Audi Mexico, said that the investment in the Puebla Audi plant in San José Chiapa will allow it to begin producing fully electric cars in Audi’s e-tron line. It is not clear which models will be produced at the Puebla plant, although the facility — which currently employs 5,000 — already builds the Audi Q5 SUV plug-in hybrid vehicle.

Audi’s latest investment in Puebla will create up to 500 new jobs in the state.

Salomón said that the state government has a plan for training and educating specialized technicians to maintain Puebla’s role as an industrial cluster and a generator of qualified professionals.

According to Mashour, Audi will build the EV manufacturing unit into the San José Chiapa factory, which began operations in 2016. On Audi Mexico’s 10-year anniversary in 2023, the plant achieved the production of 1 million Audi Q5 units for the global market.

Audi Mexico aligns with the various programs promoted by its parent company in Germany, the Volkswagen Group, such as Audi’s environmental program Mission: Zero, which aims for worldwide carbon-neutral production at all Audi production sites by 2025. Last year, Audi said that the San José Chiapa plant was 80% compliant with that environmental goal. 

In March, Audi Chief Executive Gernot Doellner told reporters at an event in Ingolstad, Germany that Audi is committed to bringing its last car with a combustion engine to market in 2026.

According to the national statistics agency INEGI, the automotive industry in Puebla grew 9.2% in vehicle manufacturing last year compared to 2022, thanks to Audi and Volkswagen’s production of 524,348 units. 

However, production levels in Puebla have yet to recover to pre-pandemic numbers, when both of the two plants produced a total of 600,075 cars. 

Earlier this year, Volkswagen also announced a US $1 billion investment to increase production of electric vehicles. 

With reports from Milenio, Excélsior and Mexico Industry