{"id":60067851,"date":"2025-01-10T15:17:50","date_gmt":"2025-01-10T15:17:50","guid":{"rendered":"https:\/\/dialogue.earth\/?p=60067851"},"modified":"2025-03-24T17:31:57","modified_gmt":"2025-03-24T17:31:57","slug":"qa-tariffs-could-kill-chinese-investments-in-evs-in-mexico","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/energy\/qa-tariffs-could-kill-chinese-investments-in-evs-in-mexico\/","title":{"rendered":"Q&A: \u2018Tariffs could kill Chinese investments in EVs in Mexico\u2019"},"content":{"rendered":"\n

Since his election victory in November, United States president-elect Donald Trump has repeatedly vowed to slap tariffs on the country\u2019s top trade partners, pledging to make this one of his first acts upon taking office on 20 January. Threats<\/a> to impose a 25% tariff on all products entering the US from Canada and Mexico, and an additional 10% on those from China, have stoked trade tensions, and prompted concern for globalised sectors such as the car industry.<\/p>\n\n\n\n

Automakers have sounded the alarm over the potential consequences<\/a> of the new tariffs, including increased costs and possible job losses. While it remains uncertain how the second Trump administration\u2019s measures will ultimately materialise, companies in Mexico, Canada and the United States are facing an unpredictable road ahead that could disrupt their supply chains and sales.<\/p>\n\n\n\n

Mexico is the world\u2019s seventh-largest<\/a> automobile manufacturer, and the largest in Latin America, and has in recent years attracted growing investment in the electric vehicle sector \u2013 notably from China, the world\u2019s leading EV manufacturer and market. After explosive growth<\/a> in domestic sales in the last decade, Chinese EV makers have sought to expand into new markets and set up local production overseas, including a wave of investments<\/a> in Mexico.<\/p>\n\n\n\n

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Recommended<\/span><\/span><\/div><\/a>\n\n\n\n

This expansion, however, has raised alarm in the US, where some observers have claimed<\/a> that Chinese EV makers are using manufacturing in Mexico to circumvent tariffs and access the US market, threatening its own industry. Concerns over protecting US industry already saw outgoing president Joe Biden impose<\/a> a 100% tariff on electric vehicles from China last September.<\/p>\n\n\n\n

Amid uncertainty during the election and transition periods, and with political figures in the US calling for tariffs on Chinese carmakers\u2019 Mexican-made EVs, several companies have paused their production plans<\/a> in the country.<\/p>\n\n\n\n

To delve deeper on these issues, Dialogue Earth spoke with Gustavo Jim\u00e9nez, CEO of e-Mobilitas<\/a>, a Mexico City-based consultancy focused on decarbonising the transport sector. With nearly two decades\u2019 experience in a range of domestic and international projects, Jim\u00e9nez has been a key figure in the sector and has advised multiple Chinese automakers, including Sunwin, Zhong Tong and King Long, as well as governments and development banks. The interview has been lightly edited for length and clarity.<\/p>\n\n\n\n

Dialogue Earth: Chinese electric vehicle makers have made inroads in the Mexican market in recent years, in both sales and plans for production in the country. What impact has their arrival had in Mexico?<\/h3>\n\n\n\n

Gustavo Jim\u00e9nez: In the last six years, the Chinese government and Chinese brands have brought important technological advances in electric vehicles, which made their competitiveness against internal combustion vehicles real. I was one of the first to work on electric mobility in Mexico, and the truth is that it started very slowly, but during the last six years there were many changes. Chinese vehicles arrived with much lower prices than European ones. This made prices more affordable, which motivated governments and the private sector to rethink the viability of electromobility as a reality [in Mexico], and this opened the door for business models and cost analyses to begin to be made.<\/p>\n\n\n\n

\"An<\/div>
An electric police vehicle, made by Chinese brand JAC Motors, parked in a charging station in Hermosillo, Mexico (Image: Luis Gutierrez \/ Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

At e-Mobilitas, we started to compare the total cost of ownership of an electric vehicle versus a diesel vehicle over its lifetime. The results were more interesting, with governments, transporters and the private sector all seeing that moving towards electromobility could be more cost-effective. Although the environmental impact is important, economics played a key role. We do not live in Europe, where CO2 emissions are priced [under the EU emissions trading scheme], so economic viability became the main driver of this transition.<\/p>\n\n\n\n

How do you think Donald Trump\u2019s announcements on his plans for tariffs, and the US\u2019 existing 100% rate on Chinese EVs, are affecting the industry?<\/h3>\n\n\n\n

This is a very interesting topic that could affect the Mexican economy and the entire region. In Mexico, we had a tariff exemption for electric vehicles [from countries with which it does not have free trade agreements] until the end of former president Andr\u00e9s Manuel] L\u00f3pez Obrador\u2019s six-year term in October 2024, which allowed the arrival of more electric vehicles in the country, a period in which electric public buses were implemented. The tariff tax is now being resumed, which is 20% for electric vehicles.<\/p>\n\n\n\n

Internationally, the trade war between China and the United States is affecting the industry. The United States has been putting tariffs on electric vehicles from China and is threatening to put taxes on vehicles manufactured in Mexico with Chinese components.<\/p>\n\n\n\n

The United States has an interest in protecting its own industry, and this could pose a significant challenge to the global competitiveness of Chinese electric vehicles<\/blockquote><\/cite><\/div><\/div>\n\n\n\n

This could kill investments from Chinese companies that are announcing production plans in Mexico, such as BYD and Yutong. If the United States implements these tariffs of up to 200%,<\/a> it could have serious economic consequences for Mexico, especially since many of the vehicles manufactured in Mexico are exported to the United States.<\/p>\n\n\n\n

Such a conflict would not only affect investments, but would also have an environmental impact, as it would make it difficult for cheaper and more accessible electric vehicles to arrive. In addition, the United States has an interest in protecting its own industry, and this could pose a significant challenge to the global competitiveness of Chinese electric vehicles.<\/p>\n\n\n\n

Mexico is under a new president with a good record on sustainability issues. What has Claudia Sheinbaum done to promote electric vehicles in Mexico?<\/h3>\n\n\n\n

As head of government of Mexico City [from 2018 to 2023], Claudia Sheinbaum began to promote the electrification of some bus lines, especially trolleybuses<\/a>, which generated investments and attracted more companies to promote their services. As for taxis, they were very expensive at first, but two years ago more affordable electric taxi models began to arrive.<\/p>\n\n\n\n

Since then, we have significantly increased the number of electric and plug-in hybrid vehicles in Mexico. Growth rates continue to rise and prices continue to fall. Today, there are already electric vehicles at prices similar <\/a>to combustion ones, which puts Mexico at a crucial point, as we will see more electric vehicles on the streets, which is positive for both the environment and energy efficiency.<\/p>\n\n\n\n

Claudia, in her own position, has always been aware of environmental issues. Although the federal government has promoted renewable energy in a half-hearted way, Claudia has maintained a stronger focus on energy awareness and sustainable mobility. This six-year term will surely take up the issue of renewable energy and environmentally friendly vehicles, which is crucial, since the transportation sector is one of the largest emitters of greenhouse gases in Mexico.<\/p>\n","protected":false},"excerpt":{"rendered":"

Dialogue Earth speaks with Mexican electromobility expert Gustavo Jim\u00e9nez, as Trump\u2019s tariff threats add to uncertainty in the global auto industry<\/p>\n","protected":false},"author":3250,"featured_media":60067861,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[757],"tags":[13444,50042156],"hashtags":[],"country":[50002597],"class_list":["post-60067851","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-electric-vehicles","tag-overseas-investment","country-mexico"],"acf":[],"yoast_head":"\nQ&A: \u2018Tariffs could kill Chinese investments in EVs in Mexico\u2019<\/title>\n<meta name=\"description\" content=\"Dialogue Earth speaks with Mexican electromobility expert Gustavo Jim\u00e9nez, as Trump\u2019s tariff threats add to uncertainty in the global auto industry\" \/>\n<meta name=\"robots\" content=\"index, follow, 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