Behind him "No" From Musk to the Tesla gigafactory, Mexico has a plan: make its own small and cheap electric car

The electric car has become a priority issue in geopolitics. Europe and the United States have joined hands to set tariffs to stop the arrival of the Chinese electric car. China, for its part, is not going to sit idly by and has a plan to avoid tariffs: removable kits. But it is not its only ace up its sleeve: there is also Mexico, the country that China wants to use as a gateway to the United States.

It is not clear that Mexico will not experience tariffs from the United States, something that has stopped Tesla’s plans to build a gigafactory in its tracks. But, when a door closes, a window opens, and Claudia Sheinbaum’s government has confirmed that they are going to manufacture cheap electric cars in Mexico. The problem is that it is not that simple.

No to the gigafactory. We are going in parts, since it is a matter that has crumbs. Early last year, Tesla shared its plans to open a new gigafactory in Mexico. It seemed that the main obstacle between the previous government of Manuel López Obrador and Musk was the enormous consumption of water that these plants have and, ten months after the announcement, not a single brick had been laid despite the fact that the project was still within the objectives of Tesla. You may not end up wearing anything at all.

“It doesn’t make sense”. A few months ago, with Trump—whom Musk supports even though they don’t have the same vision on the autonomous car—stating that it would impose tariffs on products manufactured in Mexico, plans for a gigafactory in Nuevo León were beginning to become clear. But not in the sense that the Mexican state would have liked.

Musk stated that we would have to see what the situation was after the elections, since if Trump wins and tariffs are applied, “it would not make sense to invest much in Mexico.” This implies that no jobs will be created and whoever wants a Tesla will have to continue importing it, so the price will not be attractive.

Well we do it ourselves. However, Tesla’s rivals are already arriving. BYD continues with its plans to open a factory in the center of Mexico and more and more Chinese electric vehicles are arriving, such as ARRA cars. AMLO now commented Trump’s move, stating that it was just talk and should not be taken seriously, but the current president does go all out when she states that they will have their own affordable electric cars ‘Made in Mexico’.

In recent statements, President Sheinbaum has commented that, in any case, Tesla cars were too expensive for the Mexican market, even the Model 3 which costs about $30,000. “The idea is to use the ingenuity of Mexican companies and researchers to assemble a compact and cheap electric car,” says Sheinbaum, who also states that “the objective is to create chains so that this electric car is made in our country.”

serious problems. Now, not everything is as pretty as it seems. To start, you have to take into account the price of charging a battery. Currently, there are subsidies for domestic electricity consumption, but this applies to consumption in a certain range. When that range is exceeded (suitable for lighting and appliances), the rate grows exponentially. Furthermore, it must be taken into account that the electrical network is not strong enough in various parts of the country.

On the other hand, Mexico nationalized lithium mines at the beginning of last year and the problem was not extracting it, but what to do next. López Obrador himself recognized that they would need private investment to convert lithium into batteries, something that has an enormous cost and that the state cannot assume. And without batteries, that dream of a cheap electric car made 100% in Mexico… is faltering.

Too many questions. Beyond this declaration of intent, Sheinbaum has not commented on an indicative sales price for the Mexican market and, in addition, this electric car will have to compete against those that come from China, some extremely compact and with prices of around $1,000 (such as some motorcycles).

We must be attentive to see how Mexico’s plans to open its 100% Mexican electric car factory evolve, but it certainly has a series of obstacles along the way that will not be easy to avoid.

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