BloombergNEF has identified two points as those that could make the country less competitive: a constant drop in investment in renewable generation –which has been paused after the cancellation of the auctions at the beginning of the six-year term– and the political vision that prevails over the future of the industry.
The administration has gradually changed the constant regarding investment in the lithium value chain: it has gone from a total closure to opening the possibility that the state-owned LitioMX associates with private companies, although it has not given more details about that. . “There are coming requirements that the government be a majority shareholder in all projects and this seems to me to leave an unclear role for the private sector and could also stifle development as we have seen on the renewable energy side,” Ellis says in a interview. “Mexico does not necessarily need to exploit lithium reserves to seize the opportunity to manufacture batteries.”
BloombergNEF has identified the way lithium is found on Mexican soil as one of the biggest obstacles to its exploitation. The metal is found in clay, a kind of sand. The process, analysts have said, is more expensive than in other countries, where the metal is found in rock or salt flats.
The Morenista government has invested in the Sonora Plan, a project that plans to combine solar energy generation and battery manufacturing in the north of the country. But BloombergNEF says the political side could stifle development. Analysts agree that the country could take time to develop the industry and then achieve extraction of the metal once prices are already well below current rates.
BloombergNEF has identified the way lithium is found on Mexican soil as one of the biggest obstacles to its exploitation. The metal is found in clay, a kind of sand. The process, analysts have said, is more expensive than in other countries, where the metal is found in rock or salt flats.
But for now the costs in Mexico have great advantages: BloombergNEF has calculated that the production of the batteries could cost up to 37% less than the process in the United States. “Mexico’s largest savings are related to labor and manufacturing costs, which include electricity and water,” the analysis says. “Mexico could benefit from being ‘closer’ as supply chains change and US-Mexico-Canada. The free trade agreement favors local production to meet the growing regional demand for electric vehicles.
