Energy Storage Could Cut Mexico Auto Expenses by 40%

The Mexican automotive sector stands to benefit significantly by adopting energy storage systems, potentially reducing electricity expenses by up to 40%, according to Enlight report. Given the substantial energy demands of automotive manufacturing facilities and the considerable costs associated with electricity usage, this initiative has become increasingly crucial.

Manuel Ahumada, Commercial Director, Enlight, a Mexican company specializing in renewable energy solutions and smart microgrids, highlights the sustainability challenges posed by the automotive sector's growth. He notes that the transition to electric vehicles (EVs) will increase material emissions from 18% to 60% of the vehicle lifecycle by 2040, according to consulting firm McKinsey. 

"Currently, the transition from internal combustion vehicles to electric ones is underway, with a predominant focus on emissions from vehicle operation. However, it's important to recognize that the entire manufacturing process also demands substantial energy," noted Ahumada. According to the 2022 National Energy Balance, 68.8% of Mexico's energy matrix relies on fossil fuels.

According to Enlight, solar energy and Battery Energy Storage Systems (BESS) present efficient solutions. Solar panels can reduce industrial energy costs by up to 60%, while BESS ensures operational continuity by mitigating the variability of renewable sources.

"Generating energy via solar panels emits no CO2, whereas consuming grid energy equates to emitting 438 grams of CO2 per kWh. Photovoltaic systems not only cut costs but also help reduce emissions,” said Ahumada.

The transportation equipment manufacturing sector, with the automotive industry as a notable component, ranks as the second most important in the Mexican economy, contributing 2.9% to the GDP. According to the National Institute of Statistics and Geography (INEGI), April saw a 21.74% year-over-year increase in vehicle production, reaching 358,575 units. This brought the total for the first four months of 2023 to 1,286,356 vehicles, a 5.72% rise compared to the same period the previous year.

INEGI's latest Administrative Registry of the Light Vehicle Automotive Industry (RAIAVL) reported a 21.74% increase in vehicle production in April compared to the same month last year. This surge also saw a 14.38% rise in the export of light automotive units. 

Nearshoring has significantly boosted investment in Mexico, with Foreign Direct Investment (FDI) in the automotive and truck manufacturing sectors reaching a record US$5.4 billion during the first three quarters of 2023, marking a 67.7% year-over-year increase, according to the Ministry of Economy.

The sector could reduce emissions by up to 66% by 2030 without additional costs, provided there is industry-wide collaboration and immediate action. The monthly energy consumption of automotive sector buildings is very high, and their electricity bills often exceed millions. Therefore, solar energy solutions become imperative to reduce these costs. In industrial contexts, implementing solar panels can cut electricity bills by up to 60%.