Mexico’s Shift From Manufacturing to Cutting-Edge Innovation

Mexico’s automotive and aerospace industries face a critical challenge: bridging knowledge gaps to maintain competitiveness. In automotive, the need for specialized skills is growing rapidly amid digitalization, automation, and the shift to electric vehicles (EVs). The aerospace and defense sector similarly struggles to attract and retain qualified professionals.

Daniel Hernández Camacho, Director, Querétaro Automotive Cluster, notes, “There is a clear trend toward reduced demand for highly manual tasks. Companies are assessing how labor costs, though still competitive, can be replaced by automation.”

Recruiting technical talent with strategic and innovative capabilities remains difficult. Alfonso Peña, General director, Tooling Cluster, highlights partnerships with universities to establish training centers aligned with industry needs. “Most instructors are technicians from our member companies, keeping training hands-on and aligned with real industry needs,” Peña told MBN. 

The aerospace sector faces similar constraints. Antonio Velázquez Solís, Director, Aerocluster, reports that employment in Queretaro’s aerospace industry rebounded from 8,500 during the pandemic to 10,500 in 2023, with projected annual growth of 10–20%. Collaboration between industry and academia through dual education and technical programs is key to developing a workforce capable of sustaining this expansion. 

Globally, talent shortages continue to limit growth. A 2025 ManpowerGroup study found that 70% of Mexican employers struggle to fill vacancies, compared with a 74% global average. Roles in operations, logistics, IT, data analysis, engineering, and sales remain particularly difficult to staff.  

Beatriz Hernández Rojas, President, Querétaro Business Center of Coparmex, observes, “Technology and automation are increasingly accessible, and the use of software and data-driven processes is now critical in both engineering and administrative roles.” Aligning education programs with these emerging skill needs is essential for Mexico to strengthen its position in North America—particularly in EVs, robotics, and aerospace.

R&D and OEMs: Building Domestic Innovation

Mexico’s ambitions extend beyond manufacturing toward establishing itself as a hub for design and R&D. The launch of the TT (Totalmente Tlaxcalteca) in December 2025 exemplifies this shift. With more than 80% of its components produced domestically, the TT focuses on practical urban EV transport and underscores Mexico’s potential to develop homegrown vehicles rather than relying entirely on imports.

Early pioneers such as Zacua, Mexico’s first dedicated EV company founded in 2017, illustrate both the opportunities and challenges of local EV development. CEO Nazareth Black  notes that limited incentives and dependence on imported motors and batteries forced the company to rethink technological sovereignty and strengthen domestic value chains. Their experience shows that bridging knowledge gaps in engineering, design, and manufacturing is crucial to building a sustainable local EV ecosystem.

Peña adds that Mexico has yet to fully leverage its engineering potential: “Most vehicles manufactured or assembled here rely on designs created abroad. Mexican engineering excels in production, but not yet in innovation.” Developing in-house R&D capabilities and training engineers and designers in EV technologies—including batteries, software, and automation—would help OEMs reduce import dependence, boost local capabilities, and generate high-value jobs.

The automotive experience mirrors trends in aerospace. Projects like the Halcón 2 light aircraft from Horizontec and Pegasus PE-210A from Oaxaca Aerospace highlight Mexico’s ability to execute long-term, high-skill engineering projects entirely domestically. These initiatives show that targeted investment in education and technical training can address talent shortages and build the foundation for technological autonomy.

National initiatives and industry clusters demonstrate that when specialized talent is effectively developed and integrated, Mexico can transition from a manufacturing base to an innovation hub. By strengthening technical expertise, the country can expand its global footprint not only in production but also in design and R&D. Closing these knowledge gaps is not merely a workforce issue—it is central to Mexico’s ambition to become a global leader in EVs and aerospace innovation.

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