Automakers are increasing their presence in Mexico as part of EV strategies
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Ford Motor Company (NYSE:F) officially opened its $260M new global technology and business center located in Naucalpan, Mexico.
The new campus will host business operations, global transformation activities and the largest engineering center in Mexico. The automaker said about 9K employees will work on the campus in a hybrid manner.
Ford (F) is not the only major automaker increasing its presence in Mexico. Volkswagen (OTCPK:VLKAF) and Nissan (OTCPK:NSANY) have already made significant investments, while Stellantis (STLA) is reported to be looking to invest billions to make electric vehicles in the nation and Tesla (TSLA) CEO Elon Musk is said to be considering investing in the north part of Mexico.
Beyond aiming to save costs by setting up operations or manufacturing in Mexico, automakers are also looking ahead at ways to have their electric vehicles qualify for the EV tax credit. Under the terms of the Inflation Reduction Act, qualifying EVs must be built in North America to be eligible for the tax credit. Many automakers will have to shift EV production to facilities in the U.S., Mexico, or Canada to qualify.
The government of Mexico and the U.S. are also working together on a plan to turn parts of the border region into a clean energy hub that would include solar and wind plants, lithium mining and electric vehicle factories. That initiative has the potential to help make U.S. electric vehicles more competitive if a higher mix of models qualify for the tax credit than European or Asian EVs.
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