Electromobility: Source of Collaboration, Competition

In 2021, there were five times more new EV models available in the market than in 2015, as reported by IEA. Currently there are over 20 million electric vehicles circulating across the world and it is expected that more than 26 million EV will be on the roads globally by the end of 2022.

The increasing adoption of EVs can be attributed to supporting policies promoted by countries that have committed to ambitious electrification goals in the coming decades, according to Volkswagen. Achieving a zero-emissions future is a common priority for automotive players and governments as it promises to decrease the environmental impact of the industry, improving the population’s health and promoting innovation across the sector. 

“People do not realize the importance of the historic moment that we are living in. This era is as important as when the first ICE vehicle was launched or even when the internet was created,” said Alberto Bustamante, Director General, INA.

Although players are collaborating toward the e-mobility transition, this phenomenon is also creating competition among countries for the most important resource in EV production: lithium. Lithium is essential for manufacturing EV batteries and lithium producers are setting their sights on leveraging this opportunity.

Latin America is the continent with the largest lithium reserves. The borders of Chile, Argentina and Bolivia, the lithium triangle, hold about 58 percent of the world’s lithium resources, as reported by the 2021 USGS Mineral Commodity Summary. This region is attracting international investment and it is generating great expectations within the local population. Mexico has identified the opportunity of this market and has strengthened its diplomatic relations with Bolivia to collaborate on the extraction of lithium and the production of batteries.

In May 2022, President López Obrador justified the government’s participation in the lithium industry arguing that companies were allegedly using their lithium concessions for speculation. To address this, the president announced the creation of a state-owned lithium company named Litio para México (Lithium for Mexico) which will oversee all lithium production, distribution and manufacturing activities in the country.

Although Mexico is recognized as a powerful ICE manufacturer, the country could take advantage of the electromobility transition as it has supported the manufacturing of EVs for the US market since the beginning of this trend. According to López Obrador, half of the total vehicles manufactured in Mexico will be electric or hybrid by 2030.

However, industry experts have highlighted that the green transition can be hampered without the right government incentives and if both the public and private sectors do not invest in infrastructure and research. “We have been proposing a zero-rate tax for electric vehicles that would give buyers an effective 16 percent reduction in the price of the vehicle. The private sector and the public sector also need to jointly invest in recharging infrastructure and support CONACYT in its R&D efforts to generate more electromobility solutions,” said Guillermo Rosales, Executive President, AMDA to MBN.