Mexico reversed its EV stance and attracted a manufacturing wave

In February 2021, Mexico approved electricity reform that favored the state utility over private renewable generators. Automakers questioned whether factories could receive reliable power, and GM Mexico CEO Francisco Garza warned in November that Mexico might stop being an investment destination if local conditions could not meet zero-emissions goals.

The turning point was a policy reversal under pressure. Rising wages in China and fragmented supply chains made Mexico's labor and resources attractive, while the government moved from skepticism and a threat of legal action over U.S. EV subsidies to making EV production a public-policy priority. The decision was to court the transition and convert existing auto capacity, not defend the old ICE-centered posture.

By August 2023, BMW planned cars in San Luis Potosí; GM was building in Coahuila and planning an EV retrofit in Silao; Ford made electric Mustangs in the State of Mexico; Jetour planned EVs in Guanajuato; and Tesla's Monterrey gigafactory was set to open in 2024. In under two years, Mexico had turned a threatened position into an EV manufacturing hub.

Mexico kept its carmaking base and attracted EV projects from BMW, GM, Ford, Jetour and Tesla, including new factories and conversions of existing plants.

Reliable electricity and a credible renewable path were prerequisites for zero-emissions manufacturing.

GM Mexico's public warning made the investment-credibility problem impossible to ignore.

Rising wages in China and fragmented supply chains changed the economics in Mexico's favor.

A public EV priority plus concrete factory projects converted a policy signal into visible industrial capacity.

When a policy signal threatens an industrial base, reverse the signal and remove the bottleneck investors fear; visible projects can turn a credibility crisis into a new investment cycle.

As of the article's August 2023 snapshot, EV manufacturing activity spanned San Luis Potosí, Coahuila, Silao, the State of Mexico, Guanajuato and Monterrey; Tesla's plant was scheduled for 2024. The documented outcome is investment and factory conversion, not a reported vehicle-production total.