Electromobility Faces Adaptation Difficulties

Mexican electromobility transition efforts are continuing at full speed with interest coming from companies, industry associations and governmental bodies alike. Volkswagen (VW) is maximizing its EV efforts to manufacture an electric van and allied with Ford to use the latter’s modular electric drive matrix in new vehicles. However, VW’s presence in the Mexican market decreased during February due to international factors.

The US and Mexico launched a focus group to accelerate electromobility, while the US Ambassador to Mexico asked AMIA to study these efforts. Meanwhile, South Korea’s free trade negotiations could lead to unbalanced competition.

This week in automotive:

Mexico Creates Electrification Group but Incentives are Needed

Alongside the US government, Mexico launched a focus group for the development of a binational route to accelerate the electromobility transformation in the country. US Deputy Secretary of Energy David Turk shared the country’s interest in seeing Mexico become a leader in clean energy efforts. However, Mexican industry insiders such as ANPACT President Miguel Elizalde believe economic incentives are needed in the country in order for electromobility to advance at a greater rate.

Pre-Owned Vehicles: The Great Bet for Mexico?

According to Carlos Del Río, CEO, Credimotion, the pre-owned vehicle market shows numerous opportunities after supply chains were impacted throughout the pandemic. As nearshoring increases due to international treaties, Del Río expects 2022 to be a good year for all segments of the industry.

Iconic VW Van Returns as an EV

Volkswagen announced the introduction of an electrified version of its iconic van. This zero-emission model will be the first to enter large-scale production as a part of the company’s efforts to reach carbon neutrality by 2050. The ID Buzz is a symbol of VW’s larger electrification efforts, as the company expects half of US sales by 2030 to be of EVs.

Only a Fifth of Vehicles in Mexico are Insured

The Chamber of Deputies’ General Law for Mobility and Road Safety looks to increase auto insurance requirements and sanctions for uninsured drivers in the country. Out of 35 million vehicles, only 7 million are currently insured. To increase coverage rates, the auto insurance industry is digitizing its services to become more accessible. But the limited distribution of smart phones and high-speed internet in the country presents a further hurdle to overcome.

Ford, Volkswagen Ally to Push E-mobility

Ford Motor Company and Volkswagen Group are forming a collaboration for Ford’s EV production through VW’s modular electric drive matrix. The companies had previously collaborated for the production of 600,000 all-electric units as a part of Ford’s electric future plans through which seven new electric models are expected to enter the market by 2024.

The Future of the Automotive Industry is at Risk

While the proposed federal electricity reform has good intentions and the National Electricity System needs improvement, the current administration’s reform could hurt the environment, investment and the country as a whole, writes José Zozaya, President, AMIA.

VW’s Presence in the Mexican Market Decreases

Compared to Feb. 2021, VW’s market participation decreased by 2.5 percent in Feb. 2022, falling behind Toyota and KIA whom VW previously outperformed. The reasons for the market contraction include the lack of inventory caused by the global shortage of microchips and the military conflict between Russia and Ukraine.

South Korea to Increase Vehicle Exports to Mexico through an FTA

Mexico and South Korea have begun negotiations for a free trade agreement (FTA) to promote investment between the two countries. South Korea aims to increase automotive exports to Mexico, but Mexican manufacturers worry that the agreement will put them at a disadvantage due to South Korea’s technological development, competitiveness and innovation ecosystems.

Mexico, US Could Lead Electromobility Transition

US Ambassador to Mexico Ken Salazar said Mexico and the US could become leaders of clean energy and create an economic powerhouse in North America. At Salazar’s request, the AMIA published a “Transition to Electromobility in Mexico” report analyzing the present and future of EVs and clean energy adaptation in the automotive sector.