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An Outing to San Carlos

By Alfredo Nolasco - Sociedad de Promoción y Representación de America Latina SA de CV-SPYRAL


By Alfredo Nolasco-Meza | CEO - Thu, 02/02/2023 - 13:00

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A couple of weeks ago, I had the chance to accompany a group of enthusiastic entrepreneurs in Hermosillo, Sonora, for the launching of their Economic Development Corporation (EDC)-branded "Sonora Global." 

My host, Arturo Fernández, as generous as most of the people from the north are, invited me to have a meeting with his Advisory Council in San Carlos in the municipality of Guaymas. I had the opportunity then to make the 120km trip in a beautifully shaped Tesla Model 3 that, more than a car, looks like a giant tablet. It was the first time I made a trip in a 100% electric vehicle in Mexico, and I must admit that it was quite an experience and a hope for the future.

Obviously, in the one-hour drive to "Hermosillo's beach" which is, without a doubt, a quality-of-life attraction for potential investors in that region, we had time to break down many topics, many of them related to electromobility and the opportunities for the blossoming of that vein of business in the state of Sonora and the development of this nascent technology for Mexico in general.

"Look, the car practically drives itself," my driver told me. "It must be a delight to use these apps in Mexico City when you're stuck in traffic," he teasingly commented when out of nowhere, the vehicle slammed on the brakes as a personnel carrier, the kind that abounds in the manufacturing cities of the North, ran into us. "Relax, it has sensors everywhere, and the car is still learning how to drive in the city.” This jolly happening and urban short call gave rise to a first thought.

Beyond the traction system, these vehicles by Tesla and other OEMs are highly dependent on hardware and software that involve a high degree of integration and evolution of suppliers of all kinds, mainly high-tech partners.

Alas, in Mexico, we still don't see that; and we keep on yakking with much exaltation about bringing in a car assembly plant of this type. A Tesla "giga-factory" has been announced, without yet being confirmed by the company, in the state of Nuevo Leon. But seriously, what is a giga-plant, and what does this represent? 

These mega-industrial plants are only assemblers, and, as I have commented in previous articles, the added value of Mexican labor is just that, labor, since there are hardly any substantive contributions to the research and development of technologies. So, having a Tesla plant or a Chinese truck kit assembly plant is just a slight difference, eeven on the impact of job creation since these new assembly plants base their productivity on advanced robotics and not high labor demand.

Such is the case of Tesla Giga Texas, where dozens of KUKA robots from Italy were delivered in December to reinforce the manufacturing of Tesla's pickup truck model. Eva Fox of the specialized portal www.tesmanian.com says that "given that the Model Y is already in production, it can be assumed that the line does not need such a major expansion right now. At the same time, it is a known fact that Cybertruck production should start in the next few months, which means that the factory should start installing the production equipment to calibrate it and train the employees working on it." In other words, I don't see the giga-factory in Monterrey as a fait accompli when a multi-billion-dollar investment is underway in Austin. Should we instead aim to build some KUKAs?

I see a huge opportunity to understand the supplier base, such as those who produce the sensors, the rheostat systems, and electronics, for those who develop the control and operation software and update the navigation maps, even the algorithm to detect a killer "pesera" van that crosses the road, or that the vehicle's artificial intelligence understands the messy line pattern and bumps present in most of the Mexican highway network.

I also see an excellent chance to develop "non-product-related" electromobility. For example, in Mexico, covering 300km can be easily achieved in a well-tuned internal combustion vehicle by refueling at one of the dozens of gas stations along the way. But for an electric car, the range remains an issue that we experienced first-hand when we had to slow down to save the "battery" until reaching the nearest charger and not push the "tablet with wheels bolide," painfully under the mocking gaze of a ramshackle 1980 LNG-modified Nissan Estaquitas. 

For practical purposes, we are not even talking about the development of lithium batteries, nor about the creation of new patents and research to improve the performance of the power cells of the new generations of electromobility solutions, but to develop much "simpler" solutions, such as designing, testing, and assembling chargers and super-chargers to plant them in all national roads, cities, and towns so that electric vehicles can be used on a mass scale.

Why not prepare Hermosillo, an orderly midsized city, as a proper testing ground for EVs? A town that could  really be the flagship of an electromobility stronghold to test vehicles and its environment?

Let’s remember that Hermosillo, in Sonora, the state with the largest lithium sources in Mexico, was anointed as the headquarters of LitioMex, the new state-owned company in charge of the exploitation and benefit of the "white gold." So, what more added value will we give to this wealth and new trend? Will we remain as mere sellers of another raw material and lose the opportunity to create value, new technologies, and new patents?

That was another issue for our friendly chat during the ride through the desert: It seems that Mexico is, and we will continue to be, a maquiladora country for a long time to come. A country that relies upon receiving work orders (where indeed Mexican labor will deliver high-quality products), but does not contribute or improve technology, is doomed to remain a tier-two economy.

There are some very honorable exceptions, but “maquila” is the outcome in most cases. As an example: According to the BUAP in Puebla, our country generates an average of 1,000 patents yearly, of which one-third are innovations from universities, another third from companies, and the rest from independent inventors. In other countries, it is in the private sector where greater  knowledge is generated in collaboration with public research centers. 

According to the Global Innovation Index 2022, Mexico has a score of 31 points compared to countries like Spain, with 44.6 points, or the USs, at 61 points. It is time to put more emphasis on developing innovation and patents; of course, this goes hand in hand with THE big problem in Mexico, which is raising the education level of the entire population. That is another discussion.

Back in Hermosillo, the public works meetings started. The topics we spoke about candidly on that day’s trip to the beautiful bay of San Carlos helped us awaken the interest of the audience to define Sonora’s bearings and next steps. Hopefully, this EDC will think differently and will dare to look for innovative and daring investment projects.

We wish our friends from Sonora Global all the success in finding the state's vocation for tourism, investment attraction, and foreign trade promotion.

¡Qué suene Sonora!

Photo by:   Alfredo Nolasco

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