Diana Páez
Senior Director, Energy & Mobility
ANN ARBOR, MI – The William Davidson Institute (WDI) at the University of Michigan is hosting a group of 12 engineering faculty from six different universities and research institutes in the state of Chihuahua, Mexico, as part of a study visit to Michigan this week. The visit is part of the Zero-Emissions Vehicle (ZEV) academic partnership implemented by WDI with support from the U.S. Mission Mexico Public Diplomacy Section.
The shift to ZEVs means educational and training institutions around the world must adapt their curricula to better respond to the evolving talent needs of the automotive industry. Educators will need to develop new courses in emerging areas, update lab equipment and facilities for hands-on training and testing, and identify new research areas, WDI research shows.
With ZEV production growing across North America and around the globe and with many new players entering the industry, preparing the workforce that will enable this transition becomes crucial. In the state of Chihuahua, Mexico, which has a robust automotive manufacturing industry, several universities are interested in integrating ZEV-related content into existing courses and creating new ones, launching new areas of research, and establishing ZEV innovation centers to propel the state toward an electric future. Partnerships are vital for educational institutions in reaching these goals.
“We recognize that the ZEV industry requires a new generation of workers with different skills and competencies,” said Fernando Alba, Undersecretary for Energy, Mining and Industry of the State of Chihuahua. “Just as we provide the talent for the traditional automotive industry, we will be well positioned to support this shift to electrification in Chihuahua, a region known for its strong manufacturing base and skilled workforce. The ZEV academic partnership and our broader engagement with WDI are helping us access world-class expertise from Michigan and develop new academic and business collaborations.”
Within academic institutions, this shift is being felt in the classrooms, in the labs, and beyond—and key to the success of new endeavors is the faculty teaching, researching, and innovating in this space.
Before arriving in Michigan, ZEV program faculty participants completed a virtual program over the course of six months, which was designed by WDI and provided an overview of Michigan’s approach to developing ZEV talent, highlighting programs and initiatives from U-M and other players across the state.
The visit is providing an immersive experience for faculty by sharing teaching and research related to ZEVs in Michigan, with the goals of deepening their knowledge and seeding future collaborations in this area. Throughout the week, the group will tour the University of Michigan’s Battery and Auto Labs, the Ford Robotics Building, Mcity, and other U-M engineering facilities. The visiting faculty also will meet with students, including teams and clubs such as the U-M Solar Car team, U-M Electric Boat, Michigan Mars Rover team, Supermileage club and Michigan Climate Ventures.
“Universities and other educational institutions working to update their existing curricula or create new programs to develop ZEV talent will need faculty with the knowledge to teach this new content, said Diana E. Páez, Senior Director, Energy & Mobility. “This means that upskilling is not limited to industry—academia too must invest in preparing educators and researchers to teach and innovate around ZEV technology.”
Beyond U-M, the group also has the opportunity to learn about ZEV training programs offered at Washtenaw Community College and to connect with faculty and experts at Macomb Community College and tour its ZEV lab. Finally, the group is connecting with ZEV startups in Detroit and visiting Newlab, a hub for entrepreneurship and mobility innovation in the city.
Capping off the study visit, the participants are completing a technical training on vehicle electrification and battery systems taught by U-M Engineering faculty and organized by Nexus at U-M Engineering, delving deeper into the most important aspects of these technologies and acquiring relevant expertise and sample lessons to incorporate in their own teaching.
Equipped with enhanced technical knowledge on these topics and with the insights gleaned from their week in Michigan, faculty participants will next develop proposals for new project ideas or collaborations within and across their universities and with interested Michigan institutions. The proposals will focus on training, research or innovation related to ZEVs.
Participating engineering faculty hail from the Universidad Autónoma de Ciudad Juárez, Universidad Autónoma de Chihuahua, Universidad Politécnica de Chihuahua, Instituto Tecnológico de Estudios Superiores de Monterrey Campus Chihuahua, Centro de Investigación en Materiales Avanzados, and Instituto Tecnológico de Ciudad Juárez.
The ZEV academic partnership builds on WDI’s ongoing collaboration with the Secretaría de Innovación y Desarrollo Económico (SIDE) and Instituto de Innovación y Competitividad (I2C) from the State of Chihuahua to help a wide range of stakeholders navigate the transition to electrification in the automotive industry.
By Diana Páez and Dana Gorodetsky
Autonomous, connected, electric and shared. These tsunami-like trends — which go by the acronym ACES — are reshaping the landscape of mobility.
Of these trends, “electric” is arguably one of the most advanced, in low- and middle-income countries (LMICs) and developed markets alike, and is the primary focus of our mobility-related work on the Energy team at WDI. We analyze opportunities and enablers related to the transition to electric mobility (e-mobility) and help stakeholders spot and tap into new opportunities to play a role in this exciting and quickly evolving space.
In our discussions with companies and entrepreneurs, academia, government, and other actors involved in e-mobility around the world, most are eager for new ways to collaborate with the ultimate goal of spurring innovation in this space. In this context, the role of mobility innovation hubs — as platforms for collaboration, conveners or enablers — is worthy of study and analysis to help inform the successful evolution of existing mobility innovation hubs and the design of others.
In a new report we’re publishing today, Mobility Innovation Hubs: Catalyzing Future Mobility, we examine six such hubs around the world, looking at their key features and business models, and drawing insights about the types of benefits and costs associated with different models.
FIGURE 1:
Mobility Innovation Hubs featured in the report
Actors in an ecosystem all have roles to play in managing changes brought about by the trend toward e-mobility. But as with any major transition, new players can help spur innovation. Mobility innovation hubs can bring new thinking, new resources, and new ways of working to take advantage of new opportunities. These hubs come in different forms depending on their specific goals and the context in which they operate, but have some features in common. Broadly speaking, they exist to bring together and support players in their ecosystem such as entrepreneurs, small and large businesses, investors, government, academia, others) to advance shared goals in the areas of future mobility. They may be standalone non-profit or for-profit organizations or partnerships, and they engage in a variety of activities depending on their audience and goals. Among the hubs we feature, business and technology support for commercialization and scale up of new mobility solutions are among the most popular services; these include consulting services, ramp-up manufacturing facilities and equipment, testing environments for new products or services, and product showrooms. Several also offer co-working space for entrepreneurs and companies, training opportunities, and events for industry members and the general public.
Mobility innovation hubs are carving out new spaces and roles in the ecosystems in which they operate. While not all hubs engage with all types of players in an ecosystem, they can provide value to all, as we note below. These hubs can also support other aspects of an ecosystem such as the infrastructure, policy framework and workforce. On the issue of infrastructure for example, hubs provide space and equipment to support companies and strengthen networks through convenings. Hubs can also improve public-private sector collaboration by bringing together government and companies, thereby supporting policy frameworks. And with respect to the local workforce, hubs also help upskill and reskill the local talent and build talent pipelines.
FIGURE 2:
Value that hubs can provide in their ecosystem
In our report we share details of the six hubs examined in Detroit, US; Windsor, Canada; Sacramento, US; Puebla, Mexico; Santiago, Chile; and Eastern Cape, South Africa. This will help you understand what type of initial investment is needed for such an endeavor, what kinds of revenue sources can support hub operations, and the range of services that can be provided by a hub. We also share key insights and takeaways for those interested in establishing a new hub in their area, including how to determine the value proposition and how to position it in the local ecosystem. At the same time, we recognize that it may not be feasible or beneficial to create a new organization in every context, so we also include recommendations for actions that existing players can take to support their local ecosystem for e-mobility.
We look forward to following the evolution of the hubs featured in this report and invite you to reach out if you are part of a different hub or interested in applying the findings to your context. We are excited about the opportunities to push the boundaries of innovation and create new platforms for stakeholders to catalyze collaboration to drive e-mobility around the world.
This report was developed as part of WDI’s Chihuahua Charging Forward project with the State of Chihuahua in Mexico. You can learn more about this project here.
Diana Páez
Senior Director, Energy & Mobility
Dana Gorodetsky
Program Manager, Energy
Ann Arbor, MI — For decades, Mexico has played an increasingly important role in the global automotive value chain, supporting OEMs and suppliers alike in developing and manufacturing everything from passenger vehicles to trucks to parts and more. As the industry shifts toward electric mobility (e-mobility) however, regional economic development leaders like those in the Mexican State of Chihuahua are looking to identify where and how they can best support the transition.
Chihuahua’s Government through the Secretariat of Innovation and Economic Development (SIDE) and the Institute of Innovation and Competitiveness (I2C) engaged the William Davidson Institute at the University of Michigan (WDI) last year to identify areas of opportunity where the State of Chihuahua is best situated to support the automotive industry’s transition to electrification. Following several months of research, WDI delivered a strategic “Roadmap to E-Mobility for the State of Chihuahua” that highlights key opportunities across the EV value chain and the key elements of the emerging global e-mobility ecosystem.
Now, WDI will help SIDE, I2C and Frente Norte, a new partner to the project, bring the roadmap to life.
“We’re aiming to help Chihuahua create a path to success by forming business connections with relevant stakeholders, providing resources to prepare their workforce and make Chihuahua an attractive destination for mobility innovation,” said Diana Páez, Senior Director of Energy & Mobility at WDI. “Our expertise in the implications of the EV transition in emerging markets, combined with our partners’ extensive automotive experience and assets, will ensure Chihuahua takes a thoughtful and deliberate approach to a successful e-mobility transition.”
Our expertise in the implications of the EV transition in emerging markets, combined with our partners’ extensive automotive experience and assets, will ensure Chihuahua takes a thoughtful and deliberate approach to a successful e-mobility transition.
As part of the engagement, WDI will work closely with the three partners through August 2024 to focus on:
To achieve these goals, WDI and Chihuahua officials have committed to creating an EV value chain asset map, engaging in quarterly webinars for Chihuahua stakeholders and developing case studies highlighting local e-mobility innovations. These activities will culminate in a high-level conference in Chihuahua to present e-mobility opportunities with key members of the auto industry, state government, academia and more.
On the talent front, WDI will deliver blueprints for Chihuahua to bolster EV-related trainings and develop e-mobility hubs to help Chihuahua develop a strong EV-centric talent pipeline in the region.
“Transforming the workforce and engaging with key players in the automotive industry will be crucial to Chihuahua’s long-term success in the EV transition. We’re confident our work with WDI will produce valuable results that will set us up for the future,” said Fernando Alba, the Undersecretary for Mining, Energy, and Industry for the State of Chihuahua. “We are eager to increase our impact on the automotive industry and strengthen our position in the e-mobility sector over the next year.”
The key to finding success in a rapidly changing automotive landscape will be to play to one’s strengths and developing strong relationships across the global EV landscape. The partnership between Chihuahua and WDI will not only embolden Chihuahua’s position in the global e-mobility value chain but will set a key example of how valuable partnerships lead to long term success.
About WDI
At the William Davidson Institute at the University of Michigan, unlocking the power of business to provide lasting economic and social prosperity in low- and middle-income countries (LMICs) is in our DNA. We gather the data, develop new models, test concepts and collaborate with partners to find real solutions that lead to new opportunities.
About SIDE
SIDE, a government office of the State of Chihuahua, fosters and facilitates the economic development of Chihuahua, in coordination with economic actors, increasing the competitiveness of business through innovation, to generate wealth and employment, and enhance the quality of life for the people of Chihuahua.
About I2C
I2C is a government agency of the State of Chihuahua that seeks to strengthen and promote scientific, technological and innovation capacities, through strategic research, technological development, and innovation (R&D&i) projects and programs that provide solutions and improve productivity and competitiveness of the productive, social, public, and academic sectors of the State of Chihuahua.
About Frente Norte
Frente Norte is a smart specialization strategy for Ciudad Juárez, Chihuahua, intended to help the city focus its efforts and resources on a limited number of ambitious and achievable priorities that can promote economic competitiveness, as well as the well-being and integral sustainability of the region in an increasingly complex and uncertain global context.
The transition to zero-emissions vehicles (ZEVs) presents big challenges to workforces, including retraining existing workers and developing new talent pipelines. The technology powering ZEVs also presents new opportunities for research and innovation, and higher education institutions play an important role in their development.
With support from the U.S. Mission Mexico Public Diplomacy Section, the William Davidson Institute at the University of Michigan (WDI) will implement an academic partnership focused on vehicle electrification training, research and innovation to support universities in Chihuahua, Mexico. Chihuahua is one of Mexico’s most industrialized regions and a hub for the automotive industry, and both the government and the private sector are investing in preparing the sector for the transition to zero-emission, electric vehicles.
Through the partnership, a select group of faculty in engineering disciplines from the state of Chihuahua will acquire or deepen technical skills related to vehicle electrification technology. This will include analyzing key industry changes and exploring academia’s role in developing new curricula and advancing innovation through partnerships with industry and other stakeholders. In addition, the program will facilitate connections with University of Michigan faculty and organizations across the Michigan mobility ecosystem. These connections will help Chihuahua faculty to glean insights from Michigan’s approach to developing talent and creating a EV knowledge network.
As is the case in many regions focused on the automotive industry, higher education institutions in Mexico face challenges aligning their academic offerings with rapidly evolving industry needs, as well as securing resources for research and innovation. In Michigan, the transition to electrification in the automotive industry is at the forefront of the economic, political and educational agenda. Several Michigan universities, community colleges and other players have moved quickly to develop a wide range of programs related to vehicle electrification. Greater collaboration between the U.S. and Mexico when it comes to training, research and innovation on EVs can play a role in supporting talent needs of an industry that is highly intertwined on both sides of the border.
“A robust EV talent pipeline will enable the transition to electrification,” said Diana E. Páez, WDI Senior Director, Energy & Mobility. “This project represents a new opportunity to promote increased training, research and innovation between educators, industry leaders and future employees in the e-mobility economy. We are grateful for the support and confidence of the US Mission in Mexico in this partnership.”
The program will involve up to 24 participants, including eight core faculty for the entirety of the program. This program will consist of virtual training sessions, an in-person training and study visit to Michigan, and a virtual showcase of ideas proposed by Chihuahua participants. In the final program component, participants will develop a collaboration proposal, a solution to a challenge they are facing, or an idea related to training, research and innovation on ZEVs that could be implemented at their host institutions based on what they have learned during the program.
The expected impacts of the program are enhanced understanding and strengthened ties between the U.S. and Mexico on the topic of electric vehicles, which can lead to improved technical skills for the workforce and further collaboration on research and innovation.
WDI will work closely with the Chihuahua Secretaría de Innovación y Desarrollo Económico (SIDE) and Instituto de Innovación y Competitividad (I2C) to implement the program. Several universities in Chihuahua have expressed interest in the partnership. Eligible universities will be invited to apply to the program, which is slated to begin this fall.
“Many of the products and services we enjoy today as consumers are the result of years of hard work and collaboration among educational institutions and industries. Zero emissions vehicles and the ecosystem to support them will require the same types of partnerships and a new generation of workers with the skills and competencies to succeed in this new industry,” said Fernando Alba, Undersecretary for Energy, Mining and Industry of the State of Chihuahua.
“We are confident that this program will help us address the current need for further training related to EVs to satisfy industry demand,” said Raul Varela, Director of I2C.
The project builds on previous work between WDI’s Energy consulting team and the Mexican State of Chihuahua. In March, WDI released the “Roadmap to E-mobility for the State of Chihuahua” to support the region’s shift to an e-mobility future.
About WDI
At the William Davidson Institute at the University of Michigan, unlocking the power of business to provide lasting economic and social prosperity in low- and middle-income countries (LMICs) is in our DNA. We gather the data, develop new models, test concepts and collaborate with partners to find real solutions that lead to new opportunities. This is what we mean by Solving for Business—our calling since the Institute was first founded as an independent nonprofit educational organization in 1992. We believe societies that empower individuals with the tools and skills to excel in business, in turn generate both economic growth and social freedom—or the agency necessary for people to thrive.
About SIDE
SIDE fosters and facilitates the economic development of Chihuahua, in coordination with economic actors, increasing the competitiveness of business through innovation, to generate wealth and employment, and enhance the quality of life for the people of Chihuahua.
About I2C
I2C is a government agency of the State of Chihuahua that seeks to strengthen and promote scientific, technological and innovation capacities, through strategic research, technological development, and innovation (R&D&i) projects and programs that provide solutions and improve productivity and competitiveness of the productive, social, public, and academic sectors of the State of Chihuahua.
Small- and medium-sized businesses drive up to 70% of global employment and gross domestic product, and many are started by determined, dedicated entrepreneurs. The economies in low- and middle-income countries (LMICs) are powered by these businesses.
Accompanying the call for entrepreneurship in emerging markets, there’s a call for the knowledge, tools and networks to bolster those businesses. Would-be entrepreneurs working to develop successful companies are seeking the know-how to get there in a more efficient, effective way. After taking part in courses on leadership, communication, and team-building, participants in the Ford Community Impact Fellows Training program — a development program for which the William Davidson Institute (WDI) at the University of Michigan has been creating courses since 2020 — asked for precisely that.
“They really wanted to know the nuts and bolts of entrepreneurship,” said Amy Gillett, Vice President of Education at WDI and co-leader of the Institute’s Entrepreneurship Development Center.
Gillett and David Estrada, Program Coordinator at WDI, created the “Starting a Business: Your Entrepreneurial Journey” course to teach participants the basic skills needed to effectively start their journeys. The 88 students in this summer’s program learned how to identify a need in the market, pitch a business plan, acquire funding, price a product and find a place for it in the market. While at work on the projects, the students were guided by 13 program mentors. These mentors had participated in previous online skills building programs offered by WDI and were eager to now share their knowledge and expertise in a guiding role.
The goal of the course was to set these committed students up for success in the business world by providing a foundation for a new company.
“We gave them an overview of the landscape and the fundamental skills they’d need to take an idea and get started,” Gillett said.
A successful entrepreneurship path is forged by experience — even if someone else lived it first.
Course guest speaker Jakub Zaludko, leader of strategy and projects at Impact Games, explained how he reshaped digital challenges toward commercial aspirations. As a trained political scientist and anthropologist, Zaludko observed how students in his home country of Slovakia were largely disengaged in the classroom, but they were noticeably focused while playing video games at home. Zaludko and his partners offered a solution: games with positive social impact goals. They built an innovative platform to develop games that encourage educational progress, promote freedom, and boost inclusion and equality.
Just as he did in the educational market, Zaludko explored how students can find a gap in their marketplace and build a solution to fill the void. Participants learned from his experience in identifying the community need, navigating the business world and launching a product.
The course content echoed similar lessons on focused solutions, mainly within low- and middle-income countries (LMICs). When developing the class, Gillett and Estrada wanted to be sure that examples and questions were sourced from spaces where students could see their own potential.
“Great ideas emerge everywhere. We don’t have any kind of monopoly in the U.S., which is why we included cases from all over the world when we created the course,” Gillett said.
Participants from nine countries, including China, Hungary, Kenya, Mexico, Nigeria, Serbia, Slovakia, South Africa and the United States, shared their backgrounds, skills and experiences with one another — all in an effort to grow their business ideas and abilities. Business can’t be built in a vacuum, and engaging relationships are just as critical to the participants’ business development as the lessons themselves.
“To be a successful entrepreneur, you need these connections — and this is a great way to start building or expanding that network, for both participants and mentors,” Gillett said. “With these courses, we are building a global network of learners and entrepreneurs.”
Beyond simply initiating these critical connections, participants were introduced to the deep value of these relationships through their course conversations, projects and group work. “I learned about the value and importance of working as a team to solve problems as they emerge,” said a participant from Nigeria. “Each team member brings a unique set of abilities to the table.”
Ultimately, participants worked together to build a business plan and create a video pitch. Gillett, Estrada, and program mentors evaluated the projects with an eye on how well the teams integrated the course lessons.
The winning pitch was for a personalized, flexible online education company: Explore Online. It highlighted the need for customized tutors on a global level, reviewed a break-even analysis for the business and considered the organization’s value proposition.
The second-place team set out to tackle the problem of teenage pregnancy and motherhood in Kenya. Vijana Artifacts dug deeply into the issue itself in their pitch and shared their solution: viable vocational training for young mothers. They shared their business model, target customers and expected revenue streams.
The Truly Glam Apparel team came in third place. Their business pitch focused on sustainable fashion and explored the gap in the marketplace. Their solution involves turning to local artisans, relying on local production teams, and opening up opportunities for personalized customer experiences.
These pitches pushed students to hone their presentation skills. “I gained a better understanding of how I can present my new project to others,” said a participant from China.
To the participants, this course wasn’t just an academic venture. It was a professional stepping stone. Most participants either had a business plan in mind before starting the class or were excited by one they came up with during the process. For them, these tools are providing the groundwork for a lifetime of entrepreneurship. This is the mission of the Ford Fund.
“Ford Fund is proud to invest in expanding access to entrepreneurship in communities where Ford does business with a focus on providing more widespread access to investment capital and educational resources, partnering with local organizations who share our desire to grow entrepreneurial ecosystems in an impactful way,” said Mike Schmidt, Director of Ford Fund.
Excited by the prospects of a new business, one participant from Kenya said: “My partner and I are on a mission to implement the idea we built during the course. Our next move is to develop a solid business plan and budget, then we’ll approach the necessary funding platforms and apply for grants.”
Buoyed by these positive impacts, the WDI Education team is on its way to creating even more courses for Ford fellows. While it will continue to run the current lessons, a new subject — driven by student suggestions — is on its way for a 2024 launch.
Ford Fund is proud to invest in expanding access to entrepreneurship in communities where Ford does business with a focus on providing more widespread access to investment capital and educational resources, partnering with local organizations who share our desire to grow entrepreneurial ecosystems in an impactful way.
About Ford Motor Company Fund
As the global philanthropic arm of Ford Motor Company, Ford Fund focuses on providing access to essential services, education for the future of work and entrepreneurship opportunities for under-resourced and underrepresented communities. Ford Fund’s partnerships and programming are designed to be responsive to unique community needs, ensuring people have equitable opportunities to move forward. Harnessing Ford’s scale, resources and mobility expertise, Ford Fund drives meaningful impact through grantmaking, Ford Resource and Engagement Centers and employee volunteerism.
About WDI
At the William Davidson Institute at the University of Michigan, unlocking the power of business to provide lasting economic and social prosperity in low- and middle-income countries (LMICs) is in our DNA. We gather the data, develop new models, test concepts and collaborate with partners to find real solutions that lead to new opportunities. This is what we mean by Solving for Business—our calling since the Institute was first founded as an independent nonprofit educational organization in 1992. We believe societies that empower individuals with the tools and skills to excel in business, in turn generate both economic growth and social freedom—or the agency necessary for people to thrive.
WDI’s Senior Director of Healthcare Delivery, Ioan Cleaton-Jones, is an independent director on the board of Grupo OSME in Mexico. OSME is constructing a new private hospital in the city of San Luis Río Colorado in Northern Mexico. OSME currently operates a large medical clinic that offers primary care, 24-hour urgent care, medical imaging, selected specialist consultations, and a pharmacy.
WDI is collaborating with the Secretaría de Innovación y Desarrollo Económico (SIDE), Frente Norte and Instituto de Innovación y Competitividad (I2C) of the State of Chihuahua in Mexico to help cement their position as a leader in the transition to e-mobility. This project includes initiatives to help connect industry leaders with opportunities related to the EV value chain, document e-mobility innovations by local companies, and prepare the talent pipeline for EVs in Chihuahua via collaborations with key stakeholders based in Michigan and in select low and middle-income countries.
Just over the border with Yuma, Arizona is the town of San Luis Río Colorado in Sonora, Mexico. Like many border communities, agricultural jobs dominate the local economy. In this community of around 200,000, Grupo OSME is a privately run medical clinic business, founded by Dr. Raúl Payán, focused on serving the health needs of agricultural workers and their families. Despite the success of the business, Payán explains that securing the necessary financing to expand OSME into a hospital has been a major challenge. But in early 2023, the North American Development Bank (NADB) and Grupo OSME signed a US$14.2 million loan agreement to finance construction of the medical complex. The deal was completed after WDI conducted due diligence on OSME’s expansion and business plans, which gave NADB the expert advice it needed to proceed with financing. The project includes the design, construction and operation of a private hospital with space for 67 beds, an emergency room, operating rooms, intensive care unit, medical imaging and laboratory, along with a medical specialties center. As the following video feature explains, at the time of this project, WDI was also developing a Healthcare Delivery Management Training program, following a request from the World Bank Group’s International Finance Corporation. Following a positive experience of the due diligence process, OSME requested training for its management team from WDI. As a result, OSME and a Ghanaian hospital were the first two businesses to participate in the course.
Ann Arbor, MI – Today, the William Davidson Institute at the University of Michigan (WDI) released the “Roadmap to E-mobility for the State of Chihuahua” to support the Mexican State of Chihuahua’s transition to electric mobility (e-mobility).
The roadmap, developed alongside Chihuahua’s Secretaría de Innovación y Desarrollo Económico (SIDE) and the Instituto de Innovación y Competitividad (I2C), delves into relevant opportunities across the EV value chain and the key elements of the emerging global e-mobility ecosystem. Additionally, the roadmap identifies the necessary stakeholders, and the most effective strategies to prepare for the e-mobility transition, highlighting its impact on Chihuahua and greater North America.
“This roadmap draws on months of research and collaboration to provide insights on opportunities Chihuahua can pursue and the stakeholders they need to engage to successfully compete in the transition to e-mobility,” said Diana Páez, Senior Director and mobility lead at WDI. “Having clear direction leads to a better understanding on how to leverage resources. We believe that confident, well-informed decision making is going to be the difference maker between the winners and losers of the e-mobility revolution.”
The identified e-mobility opportunities, including a focus on EV assembly, semiconductors and battery plants, were recommended based on Chihuahua’s current resources and ability to attract further investment from auto industry partners and support from local government. Each opportunity is accompanied with corresponding strategies to strengthen and leverage the workforce, policy framework and existing infrastructure to holistically invest in a successful implementation.
The auto industry is undergoing a rapid transformation, and our goal is to position Chihuahua as a key player in North America and beyond. The shift toward e-mobility presents an expansive range of opportunities, and WDI's roadmap provides a clear path to achieving our objectives
With nearly 184,000 people employed in the auto and transportation sector and dozens of tier 1, 2 and 3 suppliers, Chihuahua plays a crucial role in the automotive supply chain and in North America. Key investments in the e-mobility transition in the state will increase the momentum behind Mexico’s expected developments in 2023, including a national e-mobility strategy scheduled to be finalized this year.
“The auto industry is undergoing a rapid transformation, and our goal is to position Chihuahua as a key player in North America and beyond. The shift toward e-mobility presents an expansive range of opportunities, and WDI’s roadmap provides a clear path to achieving our objectives,” said Fernando Alba, the Undersecretary for Mining, Energy, and Industry, for the State of Chihuahua. “We are eager to maintain our influence in the auto industry and bolster our position in the e-mobility sector in the coming years.”
Many of the recommendations in the roadmap stem from what was learned about Chihuahua’s preparedness to shift to e-mobility. To do this, WDI developed an “E-Mobility Readiness Assessment” tool to evaluate Chihuahua’s overall “readiness” to manage this transition, with a focus on production of light-duty EVs. The tool can also be used to evaluate the readiness of other markets around the globe and inform governments on the e-mobility opportunities available in their own countries.
About WDI
At the William Davidson Institute at the University of Michigan, unlocking the power of business to provide lasting economic and social prosperity in low- and middle-income countries (LMICs) is in our DNA. We gather the data, develop new models, test concepts and collaborate with partners to find real solutions that lead to new opportunities. This is what we mean by Solving for Business—our calling since the Institute was first founded as an independent nonprofit educational organization in 1992. We believe societies that empower individuals with the tools and skills to excel in business, in turn generate both economic growth and social freedom—or the agency necessary for people to thrive.
About SIDE
SIDE fosters and facilitates the economic development of Chihuahua, in coordination with economic actors, increasing the competitiveness of businesses through innovation, to generate wealth and employment, and enhance the quality of life for the people of Chihuahua.
About I2C
I2C is a government agency of the State of Chihuahua that seeks to strengthen and promote scientific, technological and innovation capacities, through strategic research, technological development, and innovation (R&D&i) projects and programs that provide solutions and improve productivity and competitiveness of the productive, social, public, and academic sectors of the State of Chihuahua.
By Diana Páez and Dana Gorodetsky with research by Dylan Kapur
The United States, China and the European Union have earned many of the eye-grabbing headlines on electric vehicle (EV) technologies and adoption in the last few years. However, low- and middle-income countries (LMICs) are not taking a back seat. Many players in these markets are moving rapidly in business innovation, government strategies and investment to support the transition, albeit on a smaller scale than the higher-income economies of the world. Understanding these dynamics has been key to our research on the WDI Energy team, tracking trends and best practices around the world and in key LMIC markets, and synthesizing and applying this knowledge in our own work with energy and mobility companies and stakeholders.
Our recently published report, “Mapping the e-Mobility Transition: Opportunities and Enablers*,” examined the implications of this transition. Importantly, we’re emphasizing the changes and opportunities from a production point of view and how these are playing out in different markets. While we primarily focused on the light duty vehicle segment, we also touched on a few others that are quickly electrifying, or have the potential to do so relatively easily. The report addressed two main areas: high potential business opportunities along the EV value chain and the enabling ecosystem, including key players capable of facilitating the shift to producing EVs in a given market.
It is no secret that EVs represent a major shakeup for the automotive industry. And while this shakeup brings several challenges, we focused our research on identifying some of the many business opportunities that this shift creates. Taking a prospective approach, we looked at trends we expect will be relevant in the next five to 10 years and identified short- and medium-term opportunities for businesses, which we organized along each part of the value chain. (See Figure 1 below). In the report, we discuss these opportunities in more depth, including key drivers as well as skills and expertise needed to engage in these opportunities.
FIGURE 1
Source: WDI based on industry research.
Adapting to a technology shift of this magnitude necessitates an enabling environment and ecosystem of support that can make it possible for players to capitalize upon the opportunities that e-mobility brings. Indeed, adopting an ecosystem view can help companies and stakeholders identify complementarities and interdependencies with other players and build catalytic linkages to create more value. The ecosystems best positioned to seed the innovation needed to power this transition will need the right resources, players and enablers to shake up the status quo. In our report, we looked at players and enablers that are relevant to the e-mobility transition:
Various players can enable the transition, including government, industry, entrepreneurs, investors, academia and interest groups. Depending on the context, there may be players that operate across areas and work to add value by connecting the dots. Our report identifies important features for each player in the context of navigating this shift, as well as the dynamic linkages among them in a given context. As an example, industry and academia can collaborate on talent development and engagement; industry also sponsors research, shares data, and commercializes research; academia provides expertise and serves as a platform for the exchange of ideas.
A country or region’s policy framework, infrastructure and workforce are the three key enablers supporting the EV shift. To better understand how these enablers can bring it about, we examined six markets: the U.S. states of Michigan and California plus India, China, South Africa and Brazil. These markets were selected due to their focus and recent efforts around e-mobility, as well their existing automotive manufacturing capacity.
Looking at the experiences in these markets, we identified examples of promising strategies to strengthen the three key enablers. These include:
Do decision-makers across sectors really need to do something about e-mobility right now? you may ask. “Yes,” we would answer. “Why?” Take a look at three key trends that capture the size and speed of the transition we are witnessing:
Governments around the globe are taking action to decarbonize the transportation sector using different tools, including establishing bans on the sale of internal combustion engine (ICE) vehicles or announcing targets and plans to do so in the near term. Looking at some of the latest announcements (Figure 2 below) we see a clear divide between developed nations with resources and domestic policies in place to ensure that their goals can be achieved, and developing nations who have transition plans and targets but no official commitments yet. We expect more policy action in this front going forward.
FIGURE 2
Source: Compiled by WDI based on sources available here.
Most of the world’s major OEMs have announced targets for electrifying their product lines, decarbonizing their businesses, and making other investments in these areas. Developed by WDI from multiple sources, the chart below (Figure 3) lists major OEMs and their related announcements as of February 2023. Nearly every OEM plans to significantly shift their product line to EVs by 2030, whether by only producing battery EVs (i.e., not including hybrids), or having EVs represent a significant share of global sales. This shift involves billions of dollars in investments. OEMs are also taking a more holistic view of decarbonization by setting targets to make their businesses carbon neutral – this will be a significant endeavor involving all of their operations as well as their products, and as such, some of these targets are longer term (2040-2050). As with other aspects of the transition, OEM ambitions are changing rapidly, with important implications for the entire value chain.
FIGURE 3
Source: Compiled by WDI with information from Forbes, Consumer Reports, and various automaker websites.
Many stakeholders are tracking EV adoption rates in different markets, and projections are made and updated often as new policies and other developments influence this ever-dynamic sector. After examining EV adoption trends and projections across several major markets , ranging from high- to medium- and low-income, we want to highlight a few patterns. (Sources for this analysis include BloombergNEF, Bain & Company, The Wall Street Journal, International Energy Administration, McKinsey & Co. and Fitch Solutions)
First, when looking at actual EV adoption rates in recent years, as measured by percentage of new passenger vehicles sold that are EVs, it is no surprise that China and Europe are well ahead of the rest of the world (with estimates of 15% and 20% respectively, compared to a global rate of 8.5%). The EV share in these markets is expected to continue growing at a fast clip through 2030, reaching approximately 50% by some estimates. In the U.S., EVs accounted for 5.8% of all new cars sold, an increase of 65% relative to 2021. The passage of the Inflation Reduction Act, with substantial funding and provisions to boost EV production and adoption, triggered updated projections to be on par with China and Europe in terms of EV adoption by 2030.
Unsurprisingly, EV adoption in LMIC markets tended to be 2% or lower in 2021. While the percentage growth in these markets has been quite high in recent years and is projected to stay high, the overall share is not projected to grow to more than 5% by 2030 in countries like India, South Africa and Mexico, among others. This doesn’t, however, tell the full story when it comes to electrification in LMIC markets, since other segments are electrifying much more quickly; two-wheel and three-wheel vehicles as well as public buses are expected to lead adoption in many of these markets in the near and medium term.
In some cases, governments are announcing ambitious targets that significantly exceed current market projections; without substantial measures to boost demand such as incentives or other policies, these goals are unlikely to be achieved. Projections beyond 2030 are difficult to make given how quickly this industry is changing, but various sources anticipate that adoption will start to level off by then in developed markets, while developing markets will continue growing at a modest pace.
Around the globe, we are witnessing action from government, industry, academia and other players whose roles are crucial in enabling the transition to e-mobility. Many questions regarding the full impact of this shift writ large remain, including:
Even with these questions, the push towards e-mobility is clear and therefore so is the need for action.
*This report was developed as part of WDI’s project with the State of Chihuahua in Mexico to develop a roadmap for the transition to e-mobility. You can learn more about this project here.
Diana Páez
Senior Director, Energy & Mobility
Dana Gorodetsky
Program Manager, Energy
