A regional supply chain
McKinsey & Company forecasts the battery value chain to increase up to tenfold between 2020 and 2030 to reach annual revenues as high as $410 billion. By 2030, 40% of the demand for lithium-ion batteries is expected to come from China.
The United States has focused on building a regional battery supply chain, to reduce dependence on Asia.
As of 2024, according to the Inflation Reduction Act, electric vehicles must integrate at least 50% North American content, that is, from the United States, Mexico or Canada, to access a tax incentive in that country. By 2028, the North American content in electric vehicles should reach 100%.
In addition, battery manufacturers must obtain at least 40% of your critical minerals for the cells of countries with which the United States has a free trade agreement. The percentage will gradually increase over the next two years and by 2026 the regional content of critical minerals would increase to 80%.
Critical minerals can also be made from recycled materials in North America, but in no way can those that have been “mined, processed, or recycled by a foreign entity of interest” be used, which leaves China out as a supplier.
Mexico sees an opportunity in it. The federal government has been promoting a comprehensive project, which it has called Plan Sonora, which includes the exploitation of lithium, a mineral necessary in the production of batteries for electric vehicles, the production of semiconductors and the development of clean energy plants.
“Well-Paying Jobs”
Some 1,100 kilometers northeast of Sonora, in Nuevo León, investments have already begun to land. Almost 25% of the foreign direct investment that the entity captured in 2022 came from the automotive sector. There were 23 projects, equivalent to 1,000 million dollars, which generated close to 10,000 jobs. Six of these investments have to do with electromobility or autonomous vehicles.
“We are seeking to attract investments related to electromobility, because it leads us to look to the future. The companies that have arrived have created very good jobs, very well paid,” says Rivas.
In October, two people with knowledge of the matter told Reuters that the company’s chief executive, Elon Muskwas considering investing in Nuevo León, on the border with Texas, where Tesla inaugurated in April of last year a gigafactory.
In December, Musk held a meeting in the state with Nuevo Leon Gov. Samuel Garcia, along with other local officials, and Ken Salazar, the US ambassador to Mexico, one of the sources said.
Although Rivas did not confirm the investment, he assured that the entity is ready to receive this type of investment. “We do not have a Sonora plan, but we do have more than 140 industrial parks, 100 universities and two super highways with which we are going to expedite exports to the United States through the Colombia Bridge. We also have a very safe state. The advantages are” , he concludes.