Mexico is done importing cheap EVs from China and India as it plows ahead with a prototype of its own. The country’s new President, Claudia Sheinbaum, said automakers plan to develop multiple models as it builds a domestic supply chain.

Although Tesla officially paused plans for its Gigafactory Mexico until after the US electric in November, the country will still build EVs domestically.

Sheinbaum confirmed on Friday that Mexico is building a series of small, cheap EVs that are expected to challenge those made in India and China. The country already has several prototypes.

“We are going to generate supply chains so that everything that is in the electric car is manufactured in the country and we import as little as possible,” Sheinbaum explained. The move comes as Mexico looks to wean off Asian imports while securing a domestic supply chain.

In her inauguration address on October 1, Sheinbaum revealed plans to launch an EV created and assembled in Mexico.

The electric car, called “Olinia,” is one of 100 key priorities Sheinbaum will pursue as President. She explained that an affordable EV will help boost adoption while making transportation safer in the region.

Mexico will rival China with cheap, compact EVs

“We will produce Olinia, which means ‘to move’ in Náhuatl. This small electric vehicle will be entirely designed by young Mexican talent in our country,” Sheinbaum said earlier this month.

Although she didn’t specify which companies would build the new models, Sheinbaum said the plan is for Mexican automakers to work together with researchers to launch multiple models.

Companies in Mexico have been making “electric motors for a long time,” she said, adding, “so the idea is to bring them together with Mexican researchers so that they can assemble this electric vehicle.”

Mexico is advancing other high-tech projects, including semiconductors, to secure a stable supply chain.

“We will integrate into the semiconductor production chain while also developing our domestic production,” she said.

The country will prioritize its Lithium supply, a critical resource for EV batteries, for domestic use. On Friday, Sheinbaum said Mexico is developing new technology to extract lithium at a lower cost.

Electrek’s Take

Mexico’s pivot to develop EVs comes as an influx of cheap EVs from China are flooding the market.

Chinese EV makers, like BYD, are quickly gaining market share in the region with low-cost models. BYD’s Dolphin Mini (Seagull EV in China) starts at under $20,000 (358,800 pesos) in Mexico.

BYD wants to sell 100,000 EVs in Mexico by next year. This year, it plans to hand over 50,000 vehicles to customers in the region. By the end of 2024, China’s leading EV maker is also expected to announce the location of its massive new manufacturing plant in Mexico.

Kia, BMW, Stellantis, and others all plan to build EVs in Mexico as the region becomes a hot spot for electric car production. Mexico hopes that building cheap EVs domestically will help reduce its reliance on imports from China.

Source: Bloomberg, Mexico Business News