Volkswagen is moving ahead with plans to build electric vehicles in Mexico. Holger Nestler, president and CEO of Volkswagen Mexico, says the automaker will provide two investment packages to advance EV production.
Volkswagen to build electric vehicles in Mexico
Speaking with Forbes Mexico, Nestler said the goal is not only to produce EVs, but to build them more sustainably.
Volkswagen will invest $750M, the first of two packages, to transform its facility in Puebla. The VW plant in Puebla is the largest auto factory in Mexico and one of the biggest within its network.
The plant currently produces models including the Jetta, Beetle, Golf, and Tiguan Long Version.
Nestler explained in the interview that Volkswagen plans to produce electric vehicles in Mexico. He added, “But first we have to start with a transformation of the industry.”
VW Mexico’s leader said the automaker is upgrading its facility to include “state-of-the-art technology.” According to Nestler, “large investments” will be made over the next one to three years to develop new electric models.
The second investment package, which will be revealed in early 2024, involves an electric vehicle that will be built in Mexico. Nestler said the package would include a significant amount of money without giving specifics.
Volkswagen Mexico’s president says the new model to be produced at the plant will be introduced in the next 12 to 15 months. Nestler states the EV will be built for Mexico, the US, and Canada.
The news comes after Tesla confirmed it was pumping the brakes at Gigafactory Mexico amid worries over the global economy. CEO Elon Musk said in early October:
And in Mexico, we’re laying the groundwork to begin construction and doing all the long lead items, but I think we want to just get a sense for the global economy is like before we go full tilt on the Mexico factory. I am worried about the high interest rate environment that we’re in.
More recently, Gigafactory Mexico said it had all the permits needed to begin construction. It was just waiting on Tesla to give it the green light.
Electrek’s Take
It’s interesting to see Volkswagen moving ahead with plans to build EVs in Mexico despite delays in its home market.
Volkswagen halted production of electric models at two German plants last week. The halt impacts EVs including the VW ID.4, ID.7, and Audi Q4 e-tron. The automaker blamed a lack of electric motors as the cause of the production halt.
The new “made in Mexico” EV would not qualify for the IRA tax credit, but it would still cut down on shipping to North America significantly.
Volkswagen currently assembles the ID.4 electric SUV at its Chattanooga, TN facility. Production began last July. Its flagship ID.7 electric sedan will go on sale next year.
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GreenPower Motor Company says it’s received three orders for 11 of its BEAST electric Type D school buses for western state school districts in Arizona, California, and Oregon.
GreenPower hasn’t made the sort of headline-grabbing promises or big-money commitments that companies like Nikola and Lion Electric have, but while those companies are floundering GPM seems to be plugging away, taking orders where it can and actually delivering buses to schools. Late last year, the company scored 11 more orders for its flagship BEAST electric school bus.
As far as these latest orders go, the breakdown is:
seven to Los Banos Unified School District in Los Banos, California
two for the Hood River County School District in Hood River, Oregon
two for the Casa Grande Elementary School District in Casa Grande, Arizona
Those two BEAST electric school buses for Arizona will join another 90-passenger BEAST that was delivered to Phoenix Elementary School District #1, which operates 15 schools in the center of Phoenix, late last year.
“As school districts continue to make the change from NOx emitting diesel school buses to a cleaner, healthier means of transporting students, school district transportation departments are pursuing the gold standard of the industry – the GreenPower all-electric, purpose-built (BEAST) school buses,” said Paul Start, GreenPower’s Vice President of Sales, School Bus Group. “(The) GreenPower school bus order pipeline and production schedule are both at record levels with sales projections for (2025) set to eclipse the 2024 calendar year.”
GreenPower moved into an 80,000-square-foot production facility in South Charleston, West Virigina in August 2022, and delivered its first buses to that state the following year.
Electrek’s Take
Since the first horseless carriage companies started operating 100 years ago (give or take), at least 1,900 different companies have been formed in the US, producing over 3,000 brands of American automobiles. By the mid 1980s, that had distilled down to “the big 3.”
All of which is to say: don’t let the recent round of bankruptcies fool you – startups in the car and truck industry is business as usual, but some of these companies will stick around. If you’re wondering which ones, look to the ones that are making units, not promises.
While some recent high-profile bankruptcies have cast doubt on the EV startup space recently, medium-duty electric truck maker Harbinger got a shot of credibility this week with a massive $100 million Series B funding round co-led by Capricorn’s Technology Impact Fund.
It’s been a rough couple of weeks for fledgling EV brands like Lion Electric and Canoo, but box van builder Harbinger is bucking the trend, fueling its latest funding round with an order book of 4,690 vehicles that’s valued at nearly $500 million. Some of the company’s more notable customers including Bimbo Bakeries (which owns brands like Sara Lee, Thomas’, and Entenmann’s) and THOR Industries (Airstream, Jayco, Thor), which is also one of the investors in the Series B.
The company plans to use the funds to ramp up to higher-volume production capacity and deliver on existing orders, as well as build-out of the company’s sales, customer support, and service operations.
“Harbinger is entering a rapid growth phase where we are focused on scaling production of our customer-ready platform,” said John Harris, co-founder and CEO. “These funds catalyze significant revenue generation. We’ve developed a vehicle for a segment that is ripe for electrification, and there is a strong product/market fit that will help fuel our upward trajectory through 2025 and beyond.”
The company has raised $200 million since its inception in 2021.
There is no state more associated with cars and car culture than Michigan – and the state that’s home to the Motor City has just taken a huge step into the future with the deployment of its first-ever all electric police vehicle.
The 2024 Ford Mustang Mach-E patrol vehicle is assigned to the Michigan State Police State Security Operations Section, and will be to be used by armed, uniformed members of the MSP specializing in general law enforcement and security services at state-owned facilities in the Lansing, MI area.
“This is an exciting opportunity for us to research, in real time, how a battery electric vehicle performs on patrol,” says Col. James F. Grady II, director of the MSP. “Our state properties security officers patrol a substantially smaller number of miles per day than our troopers and motor carrier officers, within city limits and at lower speeds, coupled with the availability of charging infrastructure in downtown Lansing, making this the ideal environment to test the capabilities of a police-package battery electric vehicle.”
In those tests, the EVs have impressed – but the MSP has been hesitant to commit to a BEV until now. “We began testing battery electric vehicles in 2022, but up until now hybrids were the only alternative fuel vehicle in our fleet,” said Lt. Nicholas Darlington, commander of the Precision Driving Unit. “Adding this battery electric vehicle to our patrol fleet will allow us to study the vehicle’s performance long-term to determine if there is a potential for cost savings and broader applicability within our fleet.”