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Global EV Transportation Review

Key Regional Markets


The automotive industry is integral to Mexico’s economic growth. The country ranks seventh in global automobile production and is the largest exporter of trucks. With a well-established industrial ecosystem and a trading agreement in North America, Mexico is favourably positioned to capitalize upon investments for electric vehicle manufacturing. The country’s own electrification of transport however remains to be seen. With an absence of fiscal incentives and lack of investment in public charging infrastructure, the transition remains uncertain.

GDP (Current Prices) USD (2021)

1,297.66 bn

GDP Growth Forecast (constant prices) (2021-2025)


EV Penetration

~3% of total new passenger vehicle sales in 2022 (includes battery electric, plug-in and hybrids)

EV Target

50% of the vehicles manufactured will be fully electric or hybrid by 2030

Planned Year of Phasing Out ICE Vehicles

GDP Source: IMF, World Economic Outlook

EV Penetration and Trend

Source: National Institute of Statistics, Geography, and Informatics (INEGI)

Pure electric vehicles (based entirely on battery) are yet to assume any significant position in the Mexican light automotive sales. With hybrids along, the electric vehicle sales come across with some tangible share in a market of over a million units of light duty passenger vehicle sales. The trend however also indicates a gradual yet prominent uptick in the battery electric vehicles. For the period January – October 2022, the sale of such vehicles was three times that of the full-year units clocked in 2021. A greater product variety with the setting up local production units could be one of the reasons for the boost in sales.

Electric buses are gradually rising in the public transportation fleet. The penetration however is negligible. Presently, just three cities corner almost all of the electric bus operation – Mexico City, Guadalajara, and Monterrey. Mexico City is the leading one, partly due to the boost it received early on from pilot projects in inducting electric buses. Various such schemes are underway to extend the existing electric bus fleet.

Another nascent, yet emerging sub-segment in the commercial electric drivetrain, is that of electric trucks. Mexico’s mining and construction industry has lately attracted significant interest from leading entities to launch demonstration projects or pilot products. Among latest examples are – Navistar, BYD, Scania which delivered electric trucks in recent times for deployment in heavy-duty freight and related applications.

Charging Infrastructure

The country’s installed charging infrastructure base comprises an estimated 2,100 stations (International Council on Clean Transportation). Mexico City has the highest concentration of the charging stations. The categories of charging stations include Tesla Destination Charger, Type 1 (saej1772), Tesla Supercharger, Schuko (EU plug), CHAdeMO, and CCS2.

Most of the charging stations are apparently based on the specific vehicle brands, instead of standardized public charging units. Thus, for instance, there are charging points available under ChargeNow initiative of BMW and Nissan, while Tesla Destination Chargers are the most ubiquitous. Progressively, the charging service models could change as the electric vehicle penetration shows signs of growth. In November 2022 for instance, Tesla announced a fee-based access to its fast-charging network in Mexico, marking a shift from offering it for free in last six years.

Policy Regulation

Till recently, transport electrification was not a policy priority for the policy and regulatory structure. Thus, there are no specific directions that can indicate a path for transitioning to electric drivetrain. There have been some key policy announcements in context of the electric vehicle industry. An important one among them is the setting up of US-Mexico joint working group on transport electrification. Three sub-groups are set up within the overall working group for light-duty vehicles, medium- and heavy-duty vehicles and the electromobility in cities. The aim is to develop a roadmap.

In June 2022, President López Obrador announced 2030 as the targeted year by when at least 50% of all the vehicles manufactured will be fully electric or hybrid. There are a few tax benefits available for the electric vehicles (under the zero emission vehicle category) – a temporary import tax exemption till 2024 and waiver of tax on new vehicles. A few other incentives are available from local authorities, such as the exemption of charges for registration for owners of select vehicle categories or makes in the cities of Hidalgo, Morelos, Puebla, Querétaro, Tlaxcala, the State of Mexico and Mexico City.

The preferential tariff regime available under the country’s free trade agreement (FTA) with the US and Canada is the only major pull-factor from policy perspective. Under the FTA norms of sourcing, Mexican sourcing of vehicles’ components and parts enables certain advantages for companies operating in the trading jurisdiction. Also important in this context is the tax credit that the recent US Inflation Reduction Act allows on certain vehicle categories produced within the FTA member countries.

Market Opportunity

A significant part of the Mexican automotive market’s opportunity lies in availability of productive labour resources and a ready industrial base for the US market across its border. Leading US-based and global auto OEMS such as General Motors, Ford, Nissan and Toyota made Mexico as their export base. The country’s free trade deal with the US and Canada (USMCA in force from July 2020, replacing the legacy NAFTA regime) helped reinforce this.

While the transition from internal combustion engines to electric drivetrains is a steep one, the same competitive advantages are valid for Mexico to exploit the opportunities. This reflects in the expansion and reconfiguration plans announced for many of the leading entities. In January 2023, the Mexican state of Neuvo Leon put forth an official confirmation of discussions with Tesla for a new Gigafactory. It could be worth close to $1 billion in investment in case plans materialize.

A related yet important point why Mexico’s industrial base is ripe to attract investments is the global re-assessment of supply chain by almost all leading automakers and their allied manufacturing partners. The shift in focus to ‘near-shore’ favours the Mexican industry, especially in context of the North American region automakers. With rules of origin norms under free tree trade agreement with US and Canada, there is a greater merit for the US-based automakers to relocate or diversify from Chinese supply chain networks. The companies considering such a shift is not limited to the US-based ones, and includes German, Swiss, and Spanish origin enterprises to capitalize upon the export-oriented infrastructure.

Company Planned Investment Focus Expected Commissioning
Ford Tripling of existing capacity of 7,000 units End-2023 or 2024
General Motors $1billion reconfiguration of Coahuila plant for new product variants 2024 (for one plant)
2035 (reconversion of other conventional capacities)
BMW 866 million investment for electric vehicle production unit at existing San Luis Potosí facility
Bombardier Recreational Products New factory in Querétaro for electric motorcycles and batteries 2024 (motorcycles)
Nidec $715 million for motors related to electric vehicles Construction to commence in April 2023

The manufacturing investment prospects in electric vehicles are not limited to the cars or light passenger modes. The heavy- duty commercial segment is finding similar serious interest. In September 2022, the heavy-duty commercial vehicle assembly company Navistar announced the production of battery electric truck at its Mexican production unit. The units produced were for delivery in the US and Canada. Scania and BYD are among the other major entities with electric truck offerings in the Mexican market. Scania was also among the earliest to set up a local electric bus manufacturing in Mexico. Volvo recently followed suit with local facility for buses.

Complementing the investment thrust in vehicles, the lagging charging infrastructure base shows signs of a rise in private sector interest. Lately, the company Evergo gained a significant place in this segment, with its acquisition of E-Drive, a charging service company in the country. In the coming years, Evergo plans an investment worth $200 million for setting up 15,000 new public and residential charging stations across the country. Its offerings include Level-2 AC charging (up to 20kW) and Level-3 DC charging (up to 600kW). In January, BMW partnered with Evergo for a planned 4,000 charging stations in Mexico over a five- year horizon and $200 million investment. The Enel Group’s planned $4 million project is another example of major private sector investments. The project involves setting up 25 charging stations and interconnection infrastructure for 51 electric buses at the Mexican capital city.

The Mexican electric vehicle ecosystem has a much bigger untapped investment opportunity in Lithium. Government’s estimates value the Lithium deposits found in the northern state of Sonora, at $600 billion. It is however subject to successful commercial mining, for which not much progress could be made. In April 2022, the government nationalized the country’s Lithium mining and processing activities, reserving it for a state-owned firm established in this regard. At the same time, the government has committed to honour the concessions granted prior to the nationalization.


The predominance of conventional drivetrain technology in Mexican automotive industry is unlikely to change significantly in the near term. Retail sales of light-duty passenger electric vehicles, in absence of subsidies, are out of mass market adoption and are restricted to select imported products and models. The progress in the commercial segment, while encouraging, is still slower than other markets as it depends on the budgetary provisions of respective local authorities.

Belatedly, there are several policy announcements aimed at accelerating the transport electrification. This is encouraging for the industry considering the emerging opportunities. Yet, the investors and the industry stakeholders will seek concrete measures especially in terms of incentives. Despite the scope available in the Mexican ecosystem, the landscape changed after the US government’s recent legislation that offers incentives for indigenous sourcing. Also pertinent is the fact that even as Mexico attracts investments for manufacturing the electric vehicles, an absence of incentives could keep penetration level stagnant in the domestic market while production picks up to cater to the export market.

Beyond incentives, the country’s policy and regulatory framework needs a coherence to set out the plan of action in transport electrification. For instance, there is no binding target for the conventional vehicles selling in the country. Same is true for any supply-side norms to align the manufacturers with policy goals. Furthermore, critical infrastructural requirements in public charging systems will require a concerted push in areas such as defining standards, provisioning for the grid power demand, power tariff structures and interoperability of charging networks.

With a lagging pace of charging stations, the fast-growing electric vehicle market is more likely to stay put on hybrid variety in passenger vehicles. At the same time, with the right steps and measures the country could look forward to secure investments from the leading global automakers for an export-oriented production hub. The mining industry can expect a similar fillip arising from the untapped potential in the critical minerals for global battery supply.