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GM flags concern over renewable energy in Mexico, sees investment risk

Stock MarketsNov 19, 2021 08:50PM ET
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© Reuters. FILE PHOTO: The General Motors plant is seen in Silao, Mexico, August 17, 2021. REUTERS/Sergio Maldonado/File Photo

By Sharay Angulo

MEXICO CITY (Reuters) - A senior executive of carmaker General Motors (NYSE:GM) raised concern about the future of renewable energy usage in Mexico, saying that without a solid legal basis for it, automotive investment in Latin America's no. 2 economy would suffer.

Francisco Garza, chief executive of GM Mexico, spoke as debate rages over a Mexican government proposal to give priority to the state-run power utility in the electricity market at the expense of private investors, particularly in renewable energy.

Participating in a panel in Mexico City, Garza said it was important for Mexico to forge conditions enabling investment in renewables, to which the company was itself committed.

"Unfortunately, if the conditions aren't there, Mexico won't be a destination for investment, because the conditions won't be given that permit us to meet our objective of having zero emissions in the long term," Garza said.

"We're evaluating that if there aren't the conditions, that dollar that was going to be invested in Mexico will go to the United States, Brazil, China or Europe, and Mexico will no longer be a key destination," he added.

Garza did not make explicit reference to the government's electricity initiative, although others on the panel did.

GM, which has been one of the top investors in Mexico since the start of the North American Free Trade Agreement in 1994, earlier this year said it planned to invest $1 billion https://www.reuters.com/business/autos-transportation/general-motors-make-1-bln-electric-auto-investment-mexico-2021-04-29 to build electric vehicles in the northern state of Coahuila.

After Garza spoke, GM Mexico spokesperson Teresa Cid told Reuters that GM was "at no time threatening" not to make the investments it had pledged for Mexico.

"GM must meet its (zero emissions) vision and we must follow that path," she said. "So that's where the risk would be."

GM flags concern over renewable energy in Mexico, sees investment risk
 

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Javier Vargas
Javier Vargas Nov 19, 2021 10:31PM ET
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Obrador is much worse than Maduro
 
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