Link EV to invest 5 bn pesos to make electric cars in Puebla

By Fernanda Celis

Link EV, a mobility subsidiary of energy company Citizens Resources, announced its plan to build a plant in the state of Puebla to make electric passenger vans and cargo trucks, a plan that will require an investment of over five billion pesos (242 million dollars).

The compound will be built starting in July and the expectation is that in less than a year it will produce 1,400 cars for the local market and exports, Sergio de la Vega, CEO of Citizens Companies, said in an interview.

“Mexico’s automotive industry is very strong. It is one of the largest exporters in the world, with robust supply chains and valuable and efficient human capital,” de la Vega said.

This is the first vehicle assembly plant that Citizens Resources, a company based in Boston, will set up in the Americas.

The project will consist of three phases: the first includes the installation of four lines that will produce one vehicle per day to reach 1,400 units per year, while the second and third, in three and five years, respectively, will enable building up to 10,000 vehicles per year.

In its first stage, the project will create 400 direct jobs and 1,250 indirect jobs, with a recruitment and training program among young university and tech college graduates from the San José Chiapa region, a town where the German company Audi already makes luxury cars.

The manufacture will be aimed at both the local market and the Latin American market, in countries such as Brazil and Chile, and in Central America. Later, the company could scale production to reach markets in the northern United States and Canada.

There are several companies in Mexico with vehicle production lines that are smaller when compared to the large investments from automakers such as Toyota, Volkswagen or General Motors.

Giant Motors Latin America, for example, assembles vehicles in Ciudad Sahagun, in Hidalgo state. The company whose largest shareholder is businessman Carlos Slim does so in alliance with the Chinese manufacturer JAC Motors.

As for electric vehicles for the productive sector, the main bet is from bread maker giant Bimbo, which through its Moldex brand manufactures delivery vans.

According to de la Vega, the changes in the electrical sector promoted by President Andrés Manuel López Obrador are not a hurdle for the company.

The day before, the Mexican Association of the Automotive Industry (AMIA), which is comprised by car assemblers in Mexico, showed their opposition to the reforms, among other things because the energy generated by the Federal Electricity Commission — the utility company that the government intends to reinforce with the reform — is usually more expensive than the energy generated by private companies from ecological processes. Another concern is that with these changes the assemblers will be unable to comply with international commitments, such as the USMCA trade agreement and the Paris Agreement.

“Actually, from the productive point of view, these policies are not an impediment; they may probably have a different effect, but not at the productive level. . . Electric mobility is coming to the world to stay. There are very important vehicle producers worldwide that have already expressed their intend to stop producing internal combustion vehicles and focus solely on electric vehicles. This is the trend beyond the policies of the countries at energy levels,” said de la Vega.

Bosch, a Germany-based provider of technology and services in the automotive and industrial sector, is also keeping an eye on the proposed electrical reform in Mexico, given its operations and interest in the electric vehicle segment.

“For us, energy policy is very important because of the automotive industry. That is why we are closely watching the electrical reform, and we believe that in the future, it is very important for Mexico to adapt to green energy because without it, electric cars have no meaning,” said Alexander Firsching, vice president of the Bosch’s San Luis Potosí plant, at a conference in early December 2021.

In turn, Oscar Ocampo, Energy coordinator at the Mexican Institute for Competitiveness (IMCO), a non-partisan research center, pointed out in October last year that Mexico has trade and climate commitments established in agreements such as the USMCA with the United States and Canada, as well as in the Trans-Pacific Partnership Agreement.

In Puebla, the automotive sector represents 43.4% of the country’s GDP and creates more than 64,000 jobs through 362 economic units.

Link to the story: Link EV invertirá 5 mil mdp para producir autos eléctricos en Puebla – noticias de negocios (