Mexico in talks with top carmakers to make electric vehicles, foreign minister says

FILE PHOTO: Mexican officials and diplomats visit the construction site of a solar energy plant, in Puerto Penasco

By Stefanie Eschenbacher

MEXICO CITY (Reuters) - Mexico is gearing up to build several manufacturing hubs for electric vehicles across the country, Foreign Minister Marcelo Ebrard told Reuters, and is in talks with some of the world's top carmakers.

The shocks of the pandemic and two years of supply chain chaos are colliding with a once-in-a-century shift of the industry's fundamental technology as combustion vehicles give way to electric ones.

Ebrard said in an interview late on Thursday that Mexico was keen to capitalize on the global shift to electric vehicles.

Mexico wants to "attract all that we can", Ebrard said in an interview on Thursday, adding that the likes of BMW and Audi, General Motors, Fiat Chrysler and Tesla had all expressed interest in producing in the country.

Ebrard said, "we'll give them all the facilities we can".

His comments come as Tesla is said to be looking to build a plant in Mexico and BMW is investing 800 million euros ($866 million) in the central Mexican state of San Luis Potosi to produce high-voltage batteries and fully electric cars.

"The Mexican auto industry, in comparison to the United States, has so many advantages," Ebrard said, pointing to its geography, existing infrastructure and expertise.

"The fiscal burden for the export sector is already a lot lower - compared with the United States."

Returning from a trip to a solar park under construction in the northern border state of Sonora, Ebrard said Mexico was focused on ensuring it had the right conditions to persuade foreign companies to invest.

"What they are more concerned about is having a guaranteed supply of clean energy, having water, having the personnel they need, facilitate electric power transmission lines," he said.

Harald Gottsche, head of the BMW plant in the state of San Luis Potosi, which will produce fully electric cars, said Mexico also needs to push the consumer shift to electric vehicles.

"It needs a political stipulation ... it doesn't really kick off just by itself. And today we do not see that in Mexico, not in a full scale," he said.

Environmentalists have criticized President Andres Manuel Lopez Obrador for pursuing a retrograde nationalist energy policy that has prioritized state company CFE and its highly polluting power plants.

But during a visit to the solar park on Thursday, Mexican officials sought to ease concerns over Lopez Obrador's commitment to a transition away from fossil fuels.

Ebrard has been more vocal on environmental and climate change issues.

In addition to electric vehicles, Ebrard said he was also keen to attract more semiconductor and battery businesses - and build out transport infrastructure in the port of Coatzacoalcos, in the Gulf of Mexico.

A possible contender for the 2024 presidential election to succeed Lopez Obrador, Ebrard said accelerating the energy transition was a priority.

"Most of the energy policy is already determined by law ... and I wouldn't change that," Ebrard said. "That's not the problem, but rather the speed at which we need to generate clean energy."

(Reporting by Stefanie Eschenbacher; additional reporting by Kylie Madry; editing by Stephen Eisenhammer and Jonathan Oatis)