T-MEC and US stimuli will motivate the lithium battery industry in Mexico

The results on the interpretation of the Rules of Origin of the Regional Value Content (VCR) they were in the gaze of the three economies that make up the T-MEC. On the one hand, Mexico and Canada shared the opinion that said agreement allowed them to round off from 75% to 100% the VCRwhile The United States considered that this rounding was not possiblewhich would have allowed him to file a tariff on vehicles of up to 17%, according to some reports from the government of that country.

The T-MEC, which came to replace the NAFTA, among its modifications had the VCR’s incorporation of key components, also known as coreparts, such as engines, transmissions and lithium Batteries, but the latter are not produced in the region.

From the perspective of Gerardo San Román, director of the consultancy Jato Dynamics for Latin America, If the ruling in favor of Mexico is confirmed, it will be an incentive for the lithium battery industryby signifying the gateway to the US market and an exchange of vehicles assembled in the country with the neighbor to the north free of tariffs.

“It strikes me how Mexico has not attracted investment, especially in the development of technologies or all manufacturing for batteries, and that we are facing the electrification of the market at a global level,” he argues in an interview with Expansion.

Another factor that will motivate the creation of the value chain around these will be the fiscal incentives from the United States for the purchase of electric vehicles assembled in the North American region, for credits up to $7,500.

The announcement of this policy was made by the United States Government in the middle of this year, which implied a change with the first signs that had been given of this in 2021, which included only vehicles assembled in the neighboring country to the north.

“We celebrate the approval by the United States House of Representatives of the “Inflation Reduction Act”, which includes electric vehicles produced in Mexico in the tax incentive proposed by the United States,” said the Ministry of Economy on his Twitter account in August of this year.