The Future of the Automotive Industry Is at Risk

Mexico’s legislative bodies are in the process of discussing a federal reform to the country’s electricity system that seeks to counteract the effects of the 2013 Energy Reform. The Federal Electricity Commission will become a state body with legal status and will be responsible for electricity and the national electrical system. The modifications present a challenge to different players in the market because it could heavily affect investments and the transition to cleaner energies.

From the automotive industry perspective, the National Electricity System and its regulatory framework have areas for improvement that could be solved by modifying the secondary legislation; and they share the disadvantages resulting from the constitutional reform initiative proposed by the Federal Executive due to the negative effects it would have on the production plants of the Mexican automotive industry and on the international commitments signed by Mexico in agreements such as the USMCA and the Paris Agreement.

The automotive industry is interested in having a transparent, efficient, competitive and progressively more sustainable National Electricity System. We are sure that all the actors involved have the same interest in generating better conditions for future investment in Mexico and Mexicans. Therefore, we believe that a way will be found to address the areas of opportunity in the electricity sector without affecting other industrial sectors.

As an industry, we have evolved following the vision of innovation and energy sustainability sought by national and international agreements and through our environmental commitment. For generations, thousands of families of Mexican workers who give life to our industry have acquired and reinforced our commitment to the environment in our country. Such is the case of the electrification of vehicles as a fundamental step to optimize resources and strengthen the reduction of emissions of polluting gasses, such as carbon dioxide, sulfur and nitrogen, while reducing the use of fossil fuels, as well as with other great contributions throughout the value chain.

We celebrate the state's commitment to improve and adapt to the needs of citizens; however, for the reasons stated above, we reject the constitutional reform initiative in question and ask the authorities to consider the negative effects that it would bring to the environment, investment and, therefore, to Mexico.

By not promoting renewable energy, our exports could be subject to trade reprisals, such as carbon taxes on manufacturing, making Mexico less attractive as an investment destination and affecting job creation. To optimize the industry’s efforts to fight climate change, it is necessary to promote the transition toward clean energies. Companies that can certify the use of clean energy in their production will contribute more to the global commitments of both companies and countries.

Failure to comply with global corporate strategies of associated companies, aimed at protecting the environment, delays the objective of reaching exclusive use of renewable energy in production processes. Failure to comply with global corporate strategies of associated companies, aimed at protecting the environment, whose objective in the transition toward renewable energies is the exclusive use of renewable energy in production processes. For the automotive industry established in Mexico to remain competitive, it is essential to ensure access to clean energy, at competitive prices and sufficient supply.

The automotive industry is undergoing an accelerated global transformation process that will change the way we understand mobility and will require profound changes in the very way in which vehicles are produced. Electric power — its capacity guarantee and the way it is produced — will be among the most important elements to define the destiny of where the vehicles of the future will be produced. Mexico has earned a privileged position in the global context of the industry, let's not put it at risk.