As part of Mexico’s industrialization, President Claudia Sheinbaum yesterday announced a plan the Mexican government is to manufacture an efficient locally made electric car. The move comes at the backdrop of Tesla’s recent move to delay the construction of a Gigafactory in Mexico a situation that has forced the government to act on its own.

Speaking to reporters in Mexico City on Monday, President Sheinbaum noted the importance of having a car that is relevant to the Mexican market’s affordability. “Tesla’s offerings, while impressive, are simply too expensive for the average Mexican consumer,” she stated. “Our goal is to create an electric car that is both accessible and proudly Mexican-made.”

The president’s plan is to form the consortium of Mexican companies and research that would work on the project, with the goal of having a competitive auto suppliers chain at home for electric cars production. This decision is mainly attributed to efforts to counter competition from cheap Chinese made electric vehicles that are now flooding Mexico’s market.

Nevertheless, the aggressive strategy presented here has a number of critical problems. First amongst these is Mexico’s current status whereby it does not produce any lithium and this is a critical component of the electric car batteries. Although the country does have lithium reserves in the north, Sheinbaum also admitted that the methods used to get these resources are currently experimental.

One more possible problem, which may act as an obstacle, is the Mexican electricity supply system. The existing capacity of the country’s power grid is challenged, and fully charging electric cars in homes would necessitate enormous overhauls. Also, Mexico has a tiered pricing structure for electricity meaning that the costs of charging may be far too high, especially for users currently in the higher tiers.

Nevertheless, the government still persists in its endeavors to continue the mentioned work. “We believe in the ingenuity of Mexican engineers and the strength of our manufacturing sector,” President Sheinbaum declared. “This project is not just about producing a car; it’s about showcasing Mexico’s technological capabilities on the global stage.”

The announcement has received both positive and negative feedback from the industrial practitioners. Those support the government’s activities, which have been active in encouraging innovation and reducing importation. Some, though, may have concerns about the possibilities of challenging industry veterans and ultra-low-cost manufacturers from China.

The Mexican Association of the Automotive Industry (AMIA) reacted moderately positively to this signal while emphasizing the necessity of greatly integrating research and development expenses. “While we support efforts to strengthen Mexico’s position in the electric vehicle market, we must ensure that this project is economically viable and can truly compete on an international level,” an AMIA spokesperson commented.

No a specific time frame or cost estimates for the project have been given by the authorities but the president of the city Sheinbaum mentioned that further elaboration of the project would be disclosed in the coming few months. She also added that there could be sweeteners for the firms to encourage them take part in the initiative but did not expound on what the sweeteners are.

This challenging goal is quite timely since Mexico’s automotive industry is starting to emerge from the crisis. According to the information from the National Institute of Statistics and Geography of Mexico (INEGI), vehicle production grew by 6.13% within three quarters of 2024 compared with the level of the same period of the previous year and comprised 3,032,663 units.

As this new epoch of Mexico’s automobile begins happily with the Mercedes Benz electric cars factory, the global auto markets will assess whether this country has the ability and knowledge to maneuver through accurate challenges of the EV automotive industry and establish a competitive product. By implication, enhanced consumer protection pursued through this initiative holds the potential to revolutionize Mexico’s economy and its auto industry in particular.