Jeep Maker may invest billions to produce electric cars in Mexico

Stellantis is considering renovating a factory in Mexico to build hybrid and electric vehicles as it transforms its lineup to meet growing demand for battery-powered transportation.

The owner of the Jeep, Peugeot and Ram brands is considering remodeling its plant in Saltillo, Coahuila, one of northern Mexico’s industrial hubs about 200 miles from the Texas border, according to people familiar with the deliberations, who asked not to be named. without permission to speak in public.

The company is also evaluating the possibility of investing instead in the state of Mexico, where it also has a plant in the city of Toluca, or in the state of Sonora, although Saltillo is the frontrunner in terms of potential locations, one of the people said. The investment would be in the multi-billion range and would take place over the coming years, the person said.

The plans have not been finalized and are still subject to change, the people said.

“We regularly invest in facilities around the world to upgrade in terms of process, vehicle production or adapt to electrification as part of our $35 billion investment in electrification and software announced at our EV Day a year ago” , said Shawn Morgan, a spokeswoman for the company. , said in an emailed response to questions.

Mexican President Andres Manuel Lopez Obrador, Finance Minister Rogelio Ramirez de la O and Economy Minister Tatiana Clouthier met with Stellanti executives including CEO Carlos Tavares on July 20 to discuss electric vehicles and the desire to strengthen the company’s supply chain in Mexico, Clouthier said at the time.

One concern for the company has been making sure it has adequate power supplies for its facility, according to two of the people familiar with its plans.

The issue of energy and Lopez Obrador’s moves to prioritize the state-owned electricity supplier at the expense of private and foreign companies have sparked an outcry from businesses. The US and Canadian governments last month requested formal talks with the Mexican government, arguing that its current policies violate a 2020 free trade agreement between the three nations.

In a tweet after last month’s meeting with Stellantis, Ramirez de la O, the finance minister, said the company’s investments in Mexico will create jobs, and that the nation can help companies ensure sufficient energy supply and a realistic and efficient transition to clean energy.

Stellantis already manufactures the compact crossover Jeep Compass at its assembly plant in Toluca. The automaker plans to bring electrified versions of the Compass to that plant in 2024, according to Sam Fiorani, vice president at AutoForecast Solutions in Chester Springs, Pennsylvania.

Stellanti’s plants in Saltillo produce its Ram 1500 and heavy-duty pickup trucks, and the Ram ProMaster Van, which Tavares has flagged as a key product to meet demand for electric vans from e-commerce companies such as Inc.

The automaker’s strategic plan calls for it to make 75 all-electric models by the end of the decade and convert 50% of U.S. sales and 75% of European sales to battery-powered vehicles.

Clouthier, the economy minister, said in an interview in May that a major U.S. automaker was looking at an investment in northern Mexico and that an announcement would be made shortly. Stellantis was formed last year from the mega-merger between Fiat Chrysler – one of the original US big three automakers – and PSA Group.

Mexico has long been a hub for auto manufacturing aimed at foreign buyers, and a number of major auto companies and parts suppliers have announced new investments. General Motors Co. makes its Chevrolet Blazer and Equinox in Mexico, when Ford Motor Co. is increasing production of its Mustang Mach-E.

China’s Contemporary Amperex Technology Co. Ltd., the world’s largest maker of batteries for electric vehicles, is considering at least two sites in northern Mexico, including Saltillo, for a factory to supply Tesla Inc. and Ford, Bloomberg News reported last month.

Mexican state governments have provided incentives to attract investment, and Tesla has even been given its own border lane into Texas to allow its suppliers in the neighboring state of Nuevo Leon to reduce wait times.

The views and opinions expressed in this story are those of the authors and do not necessarily reflect the official policy or position of NADA.

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