Diana Páez
Senior Director, Energy & Mobility
Building on frameworks developed in other markets, we continued working on the market analysis for a new technology to produce ammonia for fertilizer in a small-scale, distributed way using renewable energy. We have also been assisting the researchers in developing a new company that will take the product to market.
WDI continues to expand the company’s wind energy artificial intelligence (AI) and internet of things (IoT) products to extend operations in other geographic markets. WDI is working with connections in different countries to identify specific opportunities for Vietnam.
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.
WDI collaborated with the CCA Market Strengthening Program to generate learnings from projects supported by Irish Aid. This work entailed collecting and analyzing quantitative and qualitative data from projects in CCA’s Venture Catalyst Program and User Insights Lab. The Energy team worked with the PMI team to synthesize findings across projects based on key learning questions.
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
The world needs a major investment boost around energy output and infrastructure to meet challenges related to demand, security, and sustainability — and many of the changes will take place in emerging markets. Leaders in these nations are working hard to achieve ambitious development goals, and governments, businesses, and other stakeholders will be integral in securing the $1.3 trillion that is estimated to be needed to support the growing global population, according to J.P. Morgan’s Annual Energy Outlook. Fulfilling this demand calls for innovation, and innovation requires new voices and new ways of improving business knowledge.
This is why the William Davidson Institute at the University of Michigan (WDI) has launched the Energy Innovation in Low- and Middle-Income Countries Global Case Writing Competition. Administered by WDI Publishing, the contest is seeking new voices and expertise in the form of business case studies.
Case studies encourage current and future business leaders to expand their education, question their assumptions and discover innovative strategies. The development and use of these cases will help accelerate global understanding of the energy technologies and innovations being implemented by businesses operating in low- and middle-income countries (LMICs).
At the moment, the energy industry is facing large-scale and complex challenges, while the transition away from fossil fuels is creating new opportunities, especially in LMICs. According to the International Renewable Energy Agency, 733 million people are currently living without electricity and 2.6 billion people — many of whom are in LMICs — cook or heat their homes with fuels that are harmful to their health and the environment. These challenges can’t be resolved with old solutions and ways of thinking. Universities and colleges have the power to integrate new approaches and business models for energy challenges into their curricula to prepare the next generation of decision-makers.
“Global competitions like this can draw out new research and initiatives that we may not otherwise know about,” said Sandra Draheim, Manager of Case Publishing at WDI. “By incentivizing and rewarding the development of new cases, we aim to help students to be better informed and equipped to lead companies into the future, especially those companies focused on generating and executing innovative energy solutions in emerging markets. WDI’s case writing competition seeks to broaden and increase the pool of studies available on this essential topic.”
Students, faculty and professionals connected to the energy industry in LMICs are uniquely positioned to enhance this discussion. “Many of these changes are happening rapidly, and maybe not yet at a large scale, so new case studies can add a lot of value to the knowledge around this topic by capturing lessons learned in real-time, analyzing what is and is not working, and shining a spotlight on promising approaches,” says Dana Gorodetsky, Program Manager of Energy at WDI.
With that in mind, WDI’s Energy Innovation in Low- and Middle-Income Countries Global Case Writing Competition is a call for cases focused on compelling energy questions arising from profit-seeking businesses in emerging markets.
The competition is open to submissions from practitioners, students and faculty from around the globe. Practitioners and students must enter in collaboration with a faculty member.
An informational webinar will be held at 10 am EST, Dec. 14, and will provide an overview of the competition, as well as case writing tips. Intent-to-Enter forms are due on Jan. 31, 2023, and the final submission deadline is March 31, 2023. Find the submission requirements here.
Finalist cases will be reviewed and ranked by several industry experts: Deeana Ahmed, Vice President of Strategy, Policy, and Sustainability at ONE; Kate Gasparro, Director of Land Development and Sustainability at Bedrock Detroit; Ann O’Hara, President of Huhtamaki North America; and Dan Vermeer, Associate Professor of the Practice of Energy & Environment and Executive Director of the Center for Energy, Development, and the Global Environment at Duke University’s Fuqua School of Business.
Winners won’t just get the chance to contribute their unique perspectives to this meaningful conversation, they’ll also earn an award after the public announcement in July 2023. The first-place winner will receive $3,000, second-place $2,000, and third-place $1,000.
Dedicated EV parking spots with chargers at the Technology Hub in Ciudad Juárez.
By Diana Páez and Dana Gorodetsky
Less than a year ago, we hosted a delegation from Chihuahua, Mexico here at WDI’s offices at the University of Michigan. The group included leaders in economic development, policy, manufacturing, workforce development, technology and engineering. Each had the same concern: How to prepare their region — an important automotive hub in the country — for an electric mobility (e-mobility) future.
In the time since this visit, momentum has continued to build — globally and especially in North America — around e-mobility. The transport sector is responsible for approximately one quarter of greenhouse gas emissions (GHG) globally, which brings serious consequences for climate change, according to the United Nations Industrial Development Organization. While the environmental benefits of EVs are still being debated, the industry shift toward electrification is clear. For countries with an established automotive manufacturing capability, shifting the industry toward producing EVs – while working to create the conditions for faster adoption — involves a significant cross-sector transformation.
At WDI, our mission is to provide economic decision makers with the tools of commercial success. And there’s no question that entering the EV market or transitioning products and services to serve EVs will require a robust toolkit.
As the mobility sector moves toward electrification, we are witnessing a shakeup in the relationship dynamics among traditional automotive players. Startups and tech companies are entering the market, dynamics between original equipment manufacturers (OEMs) and suppliers are changing, and former competitors are forming strategic partnerships to keep up. The landscape is shifting, resulting in blurred boundaries among industries and a broader, more dynamic mobility ecosystem.This disruption brings challenges as well as opportunities.
Markets for electric vehicles (EVs) are expanding quickly. Globally, almost 20 million passenger EVs are on the road. Policymakers around the world are increasing government targets for phasing out sales of new internal combustion vehicles. Meanwhile, new commitments by automakers are regularly announced, confirming that the strategic direction of most is to embrace EV production over the next decade. The 2020s will be a crucial decade for EV technology and the maturation of its value chain.
Diana Páez with government and business representatives after the press conference announcing the project in Ciudad Juárez, in August 2022. (From left to right, sitting, Raúl Varela, Director of Institute for Innovation and Competitiveness, María Angélica Granados Trespalacios, Secretary of Innovation and Economic Development of Chihuahua (SIDE), Fernando Alba, Under Secretary for Mining, Energy and Industry, and Ulises Fernández, Under Secretary for Innovation and Economic Development. From left to right, standing, Sergio Mancinas, Director of INADET, Jaime Campos, Industry Director at SIDE, René Chavira, Executive Director, Desarrollo Económico del Estado de Chihuahua, and Guillermo Alvarez, Executive Director, Chihuahua Futura.
This is why we at WDI are excited to partner with the State of Chihuahua to develop a roadmap that not only points out the challenges on the horizon, but also considers how companies and communities can flourish as a result of the transition.
In our recent visit to Chihuahua, we connected with more than 30 leaders from business, academia, government, and interest groups involved in the automotive and mobility sectors who shared about their work. Building on their insights and our research, we will identify key assets that the state of Chihuahua can leverage as well as gaps and challenges that will need to be addressed to navigate the transition to e-mobility. We will analyze these inputs across three key enablers: policy framework, infrastructure and workforce.
In addition, drawing from our business knowledge and global industry perspective, we will identify the most viable opportunities for businesses and entrepreneurs in Chihuahua to compete in the e-mobility value chain. The outcome of this collaboration will be a roadmap with concrete recommendations for players in Chihuahua to capture those opportunities, and specific actions that can lead to a stronger local ecosystem to enable this shift.
While the roadmap will be developed with Chihuahua’s assets and goals in mind, our work will be useful for players in other low and middle-income countries who are ready to create their own forward-looking strategy to take advantage of this major transition.
Diana Páez
Senior Director, Energy & Mobility
Dana Gorodetsky
Program Manager, Energy
The William Davidson Institute (WDI) and the State of Chihuahua in Mexico will join together to research and develop a comprehensive strategic roadmap for the automotive manufacturing hub to transition to a competitive electric mobility ecosystem.
Nearly 184,000 people are employed in the automotive and transportation sector in the State of Chihuahua, according to a 2022 survey by INEGI, Mexico’s national statistics institute. Regional economic development leaders are preparing for the transition to electric mobility (e-Mobility) by developing a statewide strategy to increase its competitiveness and identify key capabilities needed to take advantage of current and future business opportunities in the rapidly changing sector.
In the partnership, WDI will collaborate closely with Chihuahua state government entities Secretaría de Innovación y Desarrollo Económico (SIDE) and Instituto de Innovación y Competitividad (I2C), to create a roadmap for the transition to e-Mobility.
Fernando Alba
“The objective of this collaboration is to establish a pathway on e-mobility to which we can align our actions and initiatives, developing and strengthening the skills of our citizens and promoting changes in the industry production processes. This roadmap will inform and support public policies that develop the supply chain in the state, while promoting competitiveness and efficient mobility,” said Fernando Alba, Undersecretary for Mining, Energy, and Industry, for the State of Chihuahua.
“By orchestrating agendas of smart specialization, we seek to ensure the positioning of Chihuahua as the eState of Mexico, through effective public policies and a favorable environment that guarantees economic transformation of our region, thanks to more competitive companies, participating in more profitable and future-oriented businesses,” said María Angélica Granados Trespalacios, Secretary of Innovation and Economic Development for Chihuahua.
The roadmap will explore many issues, including the key elements of the emerging e-mobility ecosystem, the players necessary to make it possible, and the most effective strategies and actions to prepare for the e-Mobility transition.
“This project will dig into many of the most relevant questions and issues that the e-mobility transition involves for players operating in this space, particularly in low and middle-income countries,” said Diana Páez, Senior Director and mobility lead at WDI. “With the answers to these questions, we will work with Chihuahua to develop a strong ecosystem that builds on their assets and strengths and helps position the state as an e-mobility leader.”
Electric vehicles (EVs) represented just 4.1% of total new vehicle sales worldwide in 2020. However, that figure doubled to nearly 9% (6.6 million vehicles) in 2021, according to the International Energy Agency. Nearly all automakers are introducing new EVs, investing heavily in R&D for electric powertrains and batteries, and several have announced plans to phase out internal combustion engine vehicles. The coming transition has created uncertainty for many companies, municipalities and workforces that depend upon the automotive industry.
“WDI’s focus will be on identifying emerging business opportunities that play to Chihuahua’s capabilities in this sector and recommending areas that the state can target for high-impact interventions. In the current mobility environment, the moves leaders make now will decide whether they win or lose tomorrow. We are delighted to see Chihuahua’s commitment to this goal and excited to partner on this project,” Páez added.
Diana Páez
In October of 2021, WDI hosted a delegation from the State of Chihuahua that included representatives from SIDE, the Artificial Intelligence Center, National Polytechnic Institute, Technology Hub, Technology Development Institute, and the Technical Institute of Juárez. Representatives from Dell and Microsoft were also in attendance. The group participated in a weeklong learning and exchange program that included stops and meetings at the University of Michigan in Ann Arbor, SPARK, the Center for Automotive Research, the University Research Corridor, the Michigan Economic Center, and the Office of Future Mobility and Electrification in Detroit, among other mobility players.
WDI works with energy and mobility innovators and entrepreneurs in low- and middle-income countries to develop and scale profitable business models. This includes designing commercialization strategies and generating knowledge and tools that help companies navigate the energy transition and take advantage of emerging opportunities. The Institute partners with University of Michigan faculty, students, and global experts working at the frontiers of solar, wind and other renewable energy solutions. In the mobility space, WDI also leverages the state of Michigan’s rich automotive heritage and vibrant mobility ecosystem to help partners navigate the industry’s ongoing transformation and take advantage of new business opportunities.
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.
WDI worked with the Secretaría de Innovación y Desarrollo Económico (SIDE) and Instituto de Innovación y Competitividad (I2C) of the State of Chihuahua in Mexico to prepare for the transition to electric mobility (e-mobility) in the automotive industry. Through this project, WDI helped Chihuahua develop a statewide strategy to increase its competitiveness and tap into current and future business opportunities in this changing sector. This work included conducting a global e-mobility ecosystem mapping, assessing Chihuahua’s strengths and identifying gaps and opportunities, and developing a roadmap to e-mobility with actionable recommendations for the state’s e-mobility strategy. Two key project outputs include the report “Mapping the E-Mobility Transition: Opportunities and Enablers” and the Roadmap to E-mobility for the State of Chihuahua.