Can the country make the most of the battery-powered revolution?
Save time by listening to our audio articles as you multitaskGeneral Motors and Ford, along with Japan’s Toyota and Nissan, have long made cars for export in the country, and more so since Mexico signed a free-trade deal with America and Canada in 1993. By 2021 that had made Mexico the world’s seventh-largest carmaker.
America has been tardy in its take-up of electric motoring compared with China and Europe, but demand fors is now growing fast, providing a ready market for Mexican-made cars. Many of Mexico’s advantages hold fors as much as for internal combustion, such as a skilled labour force that is far cheaper than across the border. “Mexico was the first plant outside Japan for us; there is an extraordinary quality of factories,” says Claudia Rodríguez of Nissan Mexico.s in Mexico.
Other factors may push carmakers to make even more vehicles and components in Mexico than they do now, says José Zozaya, who heads the Mexican Automotive Industry Association, a trade body. Supply-chain snarl-ups during the pandemic, and geopolitical tensions between China and America, have made companies think twice about relying on China for parts and production.
Car firms would probably invest even more were it not for bumps in the road. Mexico’s goal is to have’s boss in Mexico has said that 15% is more realistic. That is because incentives are lacking. When Tesla set up a “gigafactory” in Nevada in 2014 it came with a $1.3bn sweetener from the state in the form of tax credits. TheThe whimsical approach to policymaking of Andrés Manuel López Obrador, Mexico’s president, is another red traffic-light.
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