As it transforms its lineup to meet surging demand for battery-powered transport, a plant in Mexico may be renovated to make hybrid and electric vehicles.
The owner of the Jeep, Peugeot and Ram brands is considering a retooling of its factory in Saltillo, Coahuila, which is about 200 miles from the Texas border, according to people familiar with the deliberations.
One of the people said that Saltillo is the front-runner in terms of potential sites because the company has a plant in the city. The person said that the investment would be in the billions of dollars.
People said that the plans could still change.
Shawn Morgan, a company spokeswoman, said in an email that the company invests regularly in plants all around the world to upgrade in terms of process, vehicle production or adapt to electrification.
Tuvimos una productiva reunión con la empresa automotriz #FCA, con quien discutimos ruta hacia la electromovilidad y ganas de fortalecer su cadena de proveduría en el país. pic.twitter.com/h2qUP4qzSt
— Tatiana Clouthier (@tatclouthier) July 20, 2022
The Mexican President, Finance Minister, and Economy Minister met with the Chief Executive Officer of the company to discuss how to strengthen the company's supply chain in Mexico.
According to two people familiar with the company's plans, one concern for the company has been making sure it has enough electricity for its plant.
Lopez Obrador wants to prioritize the state electricity provider over private and foreign companies. The governments of the US and Canada requested formal talks with the Mexican government because of their current policies.
The finance minister said that the company's investments in Mexico will create jobs and that the nation can help firms ensure sufficient energy supply and a realistic and effective transition to clean energy.
The Jeep compass is made at the Toluca plant. Sam Fiorani, vice president at AutoForecast Solutions in Chester Springs, Pennsylvania, said that the company plans to bring an electric version of the Compass to that plant.
The Saltillo plants of Stellantis produce the Ram 1500 and heavy-duty pickup trucks, as well as the Ram ProMaster Van, which is seen as a key product to tap demand for electric vans from e-commerce companies.
There is a team up on software and delivery vehicles.
50% of US sales will be electric by the end of the decade, and 75% of European sales will be battery-powered.
The economy minister said in a May interview that a big US automaker was eyeing an investment in northern Mexico and that an announcement would be made soon. One of the original US big three automakers merged with another last year.
Major auto companies and parts providers have announced new investments in Mexico, which has long been a hub for auto production directed at foreign buyers. Ford Motor Co. is ramping up production of the Mach-E in order to meet increased demand.
The world's biggest maker of batteries for electric vehicles, Contemporary Amperex Technology Co., is considering at least two locations in northern Mexico, including Saltillo, for a plant to supplyTesla and Ford, according to a report.
In order to attract investment, the governments of Mexican states have been giving incentives, with one example being the creation of a border lane forTesla to use to cut wait times.
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