Friday, March 1, 2024

Without support for renewable energy General Motors won’t invest in Mexico

General Motors won’t invest in Mexico without laws that support renewable energy, the company’s CEO in Mexico said.

Francisco Garza said that GM and other companies won’t invest here in the short and medium term without a legal and structural framework that supports the production of renewable energy

“General Motors is not going to halt its zero-zero-zero vision,” he said, referring to the company’s commitment to a future in which there are no car crashes, no vehicular emissions and no traffic congestion.

“… If the conditions [companies require] are not on the table I believe Mexico won’t be an investment destination in the short and medium term, and as our investments take between five and seven years … if the conditions are not present, the money that was going to be invested in Mexico will go to the United States, Canada, Brazil, China and Europe, and Mexico will cease to be an important [investment] destination,” Garza told the annual convention of the Mexican Institute of Finance Executives.

His remarks came as the federal government pursues reforms that seek to increase the state-owned Federal Electricity Commission’s share of the electricity market and give power generated at its fossil fuel-powered plants priority over renewable energy on the national grid. The government is also proposing the cancellation of self-supply permits which allow companies to operate on electricity they generate themselves, including that from sources such as wind and solar.

If enacted, the proposals would deal a significant blow to private renewable energy companies that have invested heavily in Mexico since the previous government’s energy reform took effect. They would also affect companies such as GM that want to increase their use of renewable energy.

While President López Obrador champions the continued use of fossil fuels and seeks to wind back the 2013 energy reform, Garza stressed the importance of transitioning to clean, renewable energy sources.

GM has committed to investing US $27 billion between 2020 and 2025 to accelerate its transition to the manufacture of electric vehicles and autonomous vehicles. The company announced in April that it would invest more than $1 billion in Coahuila to open a new paint plant and expand its Ramos Arizpe manufacturing hub so that it can begin making electric vehicles there in 2023.

“There is an important factor that will determine whether the hand brake is put on investment or not,” Garza said, referring to government support for the renewable sector.

GM’s objective is to operate on 100% clean energy by 2040, he added.

The United States Chamber of Commerce, the Canadian Chamber of Commerce and Mexico’s Business Coordinating Council raised concerns about the federal government’s energy sector plans and policies in a letter sent to López Obrador, U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau on the eve of last Thursday’s North American Leaders Summit.

Foreign Minister Marcelo Ebrard said the leaders discussed energy – including a constitutional bill that seeks to overhaul electricity market rules – but the issue was not a major discussion point.

With reports from El Economista 

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