Litigating against the subsidy for electric cars in the United States is necessary, but it will not be enough to keep Mexico as a protagonist in the North American auto industry. It will not be enough because that subsidy is just the movement of a piece within a game of chess.
The United States has launched a multi-billion dollar plan to ensure that the majority of electric vehicle (EV) production stays on its soil. The plan is ambitious and emphasizes drastically lowering EV costs and developing home-based supply. The United States wants to be a global leader in the electric car revolution and it wants to be before the end of this decade, what will we do with that or against that?
The plan represents a threat to the viability of the Mexican auto industry. There are 950,000 direct jobs here, related to the assembly of cars, trucks and auto parts. Where are our plans to be protagonists in the production of electric cars? We are the fourth world exporter in this industry, but we are not guaranteed this position, facing a change of era. Beyond the subsidies of 8,000 to 12,500 dollars for each car, there is a whole artillery on the American side, framed in the Build Back Better program. The Biden government outlines an industrial policy full of protectionist gestures. There are echoes of the messages that Trump issued: they are less tweets and more strategy. Big American companies respond. There are incentives for automakers, mining companies, and tech companies.
General Motors last week announced plans to invest $ 3 billion in two projects in the state of Michigan. One of its plants, the Orion, will become the hub for the production of electric pick-ups. Additionally, in a joint venture with LG, it will build a battery factory in the town of Lansing. 2,700 jobs will be created between the two projects. GM’s enthusiasm for investing in the United States contrasts with the caution they now have in Mexico. On November 22, Francisco Garza’s words resounded about the lack of conditions to meet his goal of zero emissions. It was a criticism of the electrical counter-reform and something else. Garza is the president of GM in Mexico.
The State of Michigan is a logical place to bet on electric cars. It is the cradle of the American automotive industry and has $ 1 billion to subsidize the installation of EV-related projects. The resources come from a federal fund approved by Congress. In addition to direct resource delivery, Michigan plans to develop a duty-free manufacturing zone, called the Renaissance Zone. Besides Michigan, there are other players, for example, Texas. It has gained importance on the automotive map. It’s at the center of Tesla’s plans, with a large battery factory in Austin valued at more than $ 1 billion.
What do we know about the Biden administration’s plan on electric vehicles? That includes the subsidy of 8,000 to 12,500 dollars that Mexico and Canada are challenging. It is complemented by the investment of 5,000 million dollars planned to install 500,000 electric charging stations throughout the territory. The idea is that there is a charging point, minimum, every 50 miles. The renovation of the roads aims to make them electro-friendly.
The plan does not end in the winks to consumers to opt for electric vehicles. The strategy has a chapter dedicated to creating conditions to produce the components necessary to produce batteries, including lithium. Mining permits will be granted to explore and exploit deposits of this mineral. According to the White House, Ford has a lithium supplier in Nevada, GM in California and Tesla in North Carolina.
The plans are very ambitious, among other things because there is a lot to do. EV sales will reach 400,000 in 2021. They are double that of last year, but only 2.6% of total sales. In 2022, the projection is that they will reach 730,000 and in 2025 it will be 2 million. At that time, it will be only 12% of the total vehicles sold. That’s north of our border, what are our plans?
Luis Miguel Gonzalez
Editorial Director General of El Economista
Safe
Degree in Economics from the University of Guadalajara. He studied the Master of Journalism in El País, at the Autonomous University of Madrid in 1994, and a specialization in economic journalism at Columbia University in New York. He has been a reporter, business editor and editorial director of the PÚBLICO de Guadalajara newspaper, and has worked for the newspapers Siglo 21 and Milenio.
He has specialized in economic journalism and investigative journalism, and has made professional stays at Cinco Días in Madrid and San Antonio Express News, in San Antonio, Texas.
Reference-www.eleconomista.com.mx