Just days after Tesla announced the construction of a new Gigafactory in Mexico, the nation’s finance minister acknowledged on Friday that Mexico could not match the incentives the United States is offering under the Inflation Reduction Act to motivate Tesla to build a battery plant in the country.

Although Tesla has made no formal statement regarding whether or not it might build a battery plant in Mexico, local officials are saying the company has sent representatives to the central states of Hidalgo, Queretaro, and Puebla, to examine potential building sites.

At an event with Citigroup’s Mexico unit, Finance Minister Rogelio Ramirez said, “We didn’t let (Tesla) waste their time thinking that we would be able to match the U.S.’ Inflation Reduction Act.”

Passed in August, the Inflation Reduction Act contained provisions designed to encourage Electric Vehicle makers to use parts made primarily in America. Manufacturers of electric vehicles whose batteries meet a threshold of sourcing parts from the US, or other free trade partners such as Mexico, are able to pitch their cars to buyers as qualifying for a $7,500 federal tax credit.

On Wednesday, Tesla CEO Elon Musk announced Tesla would be building a new gigafactory in the Mexican state of Nuevo Leon. Local officials said the factory would require a local investment of as much as $10 billion and it would generate 10,000 local jobs.

Ramirez noted that as Mexico welcomed the investment, Tesla has said it, “did not need any sort of fiscal stimulus” except the benefits which would accrue from Mexico’s free trade agreements.

No decision on a battery plant has yet been announced.

Ramirez said, “The battery plant was not in (Tesla’s) original plan, it was the Mexican government’s suggestion.”

Ramirez said, however, that without legislation, Mexico would be unable to match the level of incentives offered by the United States.