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News Article

“Electric Twin” Strategy to Advance Electrification in Mexico

By Alejandro Enríquez | Wed, 05/19/2021 - 13:42

OEMs have designed aggressive electrification plans to meet ambitious decarbonization. Key to some of these strategies is the arrival of a large number of electrified models. As Boston Consulting Group notes: "By 2023, OEMs are expected to have brought more than 300 battery-electric and plug-in hybrid models to market, giving consumers vastly greater choice than they have today."

As electrification continues to disrupt the sector, automakers are now manufacturing "electric twins," which in broad terms refers to the same model being offered both as a traditional internal combustion engine (ICE) vehicle or with an electrified powertrain. Introducing new models to consumer markets is not simple, however, and that is where electric twins come into play. In Mexico, for instance, different brands, from small volume to market leaders, have announced ambitious plans to advance their electrification strategies.

Toyota Motor Corporation, the largest automaker by volume, is among a handful of automakers offering four different options for electrification. Luis Lozano, President of Toyota Motor de Mexico explains. "Toyota now has four electrified vehicles. First there is the hybrid-electric vehicle (HEV), we are in the its third generation of these models and serve better in markets that may lack on charging infrastructure, such as Mexico. We also have a plug-in hybrid (P-HEV), that is which is similar to the regular hybrid and can be more efficient in reducing emissions. We have a of course the battery-electric vehicle (BEV), which is the most popular in the media, but it will not necessarily dominate global markets. Finally, with our Mirai model we have introduced a fuel-cell electric vehicle to the market, this is a hydrogen-based electric. This is how we see a more sophisticated electrification strategy," he said to MBN. Toyota will also follow the electric twin strategy more aggressively. "By 2025, we will have an electric twin -in any of the four variants- of every one of our models in the world. By 2030, we will sell more electrified vehicles than ICE vehicles," Lozano told MBN.

Giant Motors Latinoamerica, Mexican producer and seller of Chinese models JAC, is now offering the least expensive fully BEV models in the country, with a starting cost of US$25,000. All of JAC models follow the electric twin strategy. "Since we are focused on a young market, we have introduced an entire lineup of electric vehicles. All JAC models have an electric twin, which means we offer the exact same model in an electric version," told Elias Massri, CEO of Giant Motors Latinoamerica to MBN.

Volvo has followed a similar strategy after it announced that that by 2025 half of its vehicle portfolio will be electric and by 2030 it will become fully electric. At the moment, the brand offers electric and hybrid version of all its models sold in Mexico, including the first fully electric SUV. Advantages of an electric twin include smaller costs of spare parts and maintenance. "We do the same with spare parts and accessories, which makes life easier for dealerships, users and workshops," says Massri.

As OEMs continue to undergo the electrification revolution of the automotive sector, new strategies may emerge. If battery costs keep reducing and best-selling models become electric, it may be easier for consumers to choose EVs. "Regardless of the market, rapidly declining battery costs, tougher government regulation, and the introduction of new EV models will continue to be the primary drivers of the shift," states BCG.

Photo by:   Michael Fauset
Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst