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News Article

Electrification of the Automotive Sector is a Priority: SRE

By Andrea Villar | Wed, 09/22/2021 - 10:15

The automotive sector has taken center stage in the transition to clean energy as both carmakers and government institutions work to reduce its carbon footprint. However, achieving this goal does not depend on the efforts of a few but on all players in the ecosystem, said Iker Almícar Jiménez Martínez, General Director of Global Economic Impulse at the Ministry of Foreign Affairs (SRE).

SRE is focusing on six strategic sectors: mobility, aerospace, health sciences, infrastructure, information technologies and automotive. In the latter, SRE has identified transportation as one of the main sources of greenhouse gas emissions in Mexico, leading the country to "face great challenges in the face of global carbon footprint reduction requirements,” said Jiménez. “We have realized that a rapid transition and a strong transformation are required. We want this sector to become a new one in the next few years.”

Mexico is currently the fourth largest automotive manufacturing country in the world, producing about 20 percent of all light vehicles in North America. It is also the largest contributor to the country's manufacturing GDP at 25 percent, accounting for a third of total exports. “All of these achievements have been built up since the former North American Free Trade Agreement (NAFTA).”

To boost this sector, SRE and the Ministry of Economy have created a strategy for the automotive sector with the goal of “electrifying transport,” Jiménez stressed. With the support of the US, he added, these agencies will create a plan to accelerate the transition to the widespread use of electric vehicles and the transformation of the industry. This plan includes the development of interdisciplinary working groups that will create transport electrification scenarios, assess the challenges involved and present a roadmap. “This has to be an effort of governments, academia and society,” Almícar said. “We all have to participate to be on the same page and make this transition as smooth as possible.”

The creation of strategic value chains, not only under the USMCA framework but also at a global level, brings great opportunities for Mexico and the automotive sector, said Jiménez, adding that the country has the potential to become a production and distribution hub. “Today Mexico has enough strongholds to attract investment.” The electrification strategy that the industry is experiencing in the US also provides a great opportunity for Mexico to create a local value chain in auto parts production and automotive assembly.

“The automotive sector in Mexico has a wealth of experience in parts production, assembly and distribution of high-quality vehicles,” said Jiménez. “We can take advantage of the experience we have acquired and apply it to the new global interests of sustainability.”

Andrea Villar Andrea Villar Journalist and Industry Analyst