The Ev Industry in 2023 and What to Expect in 2024

2024 has arrived, and it's time to look back and analyze how the electric vehicle market behaved in Mexico in 2023. This year proved to be a record-breaking period for the sale of private electric vehicles in the country, driven by the entry of several brands offering competitively priced vehicles. We have observed how people are gradually adopting this mode of transportation not only for the savings it brings but also because it has become a safe and reliable option for users.

In 2023, we also witnessed the plans of various automakers and their vision for the future of electromobility. We would highlight what Toyota presented and its focus on vehicles with solid-state energy storage systems. For a long time, brands like Toyota have been reluctant to push electric vehicles into the market. Following a trend set by other brands, they have always been aware that electrification takes time, hence discussing longer-term plans.

In the commercial vehicle sector, the landscape is somewhat different. Although 2023 set a record for the sale of electric trucks and buses in the country, that doesn't necessarily mean it was a good year for the industry. Despite growing by over 20%, the industry's focus was on meeting the growing demand for diesel vehicles with Euro 5 and Euro 6 technologies. Few companies devoted efforts to promoting electric solutions for last-mile operations. We would highlight brands like BYD, Scania, and Mexican companies like MegaFlux, which offer vehicle transformation services to electric. We have also seen the resurgence of brands like Foton, focusing on the light and medium last-mile segment.

Unfortunately, 2023 was a challenging year for the electric vehicle market and for electrification companies in the United States. We witnessed large and established companies like Proterra declaring bankruptcy, leading to others like Volta Trucks in Europe and Lightning Motors in the United States following the same path due to their inability to access batteries for their vehicles. This fragility demonstrates the market's dependence on a few suppliers, reinforcing the importance of companies offering electric vehicles with their own technology in key components. Additionally, some companies have stated in their year-end quarterly reports that they need additional capital to survive in 2024, complicating the landscape further.

Despite these challenges, 2024 looks promising. We see Mexico awakening to the interest in electrifying its mass public transportation, starting with cities like Mexico City and Monterrey actively seeking to introduce electric buses into their fleets with the support of companies that finance, operate, and maintain these vehicles. It is crucial to emphasize that this transition should be done consciously and with the country's benefit in mind. This moment is key for the Mexican national industry. Electrifying fleets does not benefit the country if there is no demand for national integration in vehicles purchased with public funds. While we understand the importance of attracting foreign investment and opening the market to companies offering products and services locally, we must also remember that projects requiring significant transformations are excellent opportunities to promote the local industry. Therefore, we highlight the importance of electric buses hitting the streets containing technology developed and manufactured in Mexico, with at least their bodies being made here. Promoting this is not about eliminating competition or establishing entry barriers; it's about promoting employment, economic development, human capital, and competitiveness.

2024 will be the year that tells us which companies are fit to compete in this new industry. I say this because only companies that grow consciously, are focused on creating products with an attractive value proposition, at competitive prices, and are aware of their company's size, investing in their own technology, will survive and endure. It has become clear that large manufacturers are not interested in promoting electric buses and trucks in emerging markets, giving new companies a unique opportunity to showcase their capabilities.

Likewise, we will begin to see electrification solutions in niche markets, driven by companies' desire to reduce operating costs, minimize their impact on operations, and emphasize their commitment to offering a more promising future for the new generations.

In summary, despite the challenges and obstacles faced in 2023, the electric vehicle industry in Mexico and worldwide has proven to be resilient and adaptable. The increasing adoption of electric vehicles by consumers and the entry of new companies into the market testify to the vitality and potential of this industry.

Looking ahead, 2024 promises to be an exciting and transformative year. With growing interest in public transport electrification, the introduction of innovative technologies, and the expansion of niche markets, we stand on the threshold of a new era in sustainable mobility.

The electric vehicle industry is constantly evolving, and each year brings new opportunities and challenges. But one thing is certain: the industry will continue to grow, innovate, and change the way we move.

As we prepare to embark on another exciting year, let's remember to celebrate past achievements, learn from challenges, and look to the future with optimism and enthusiasm. Because, at the end of the day, we are all on this journey together, working toward a more sustainable and promising future.

Here's to a 2024 full of innovation, growth, and success in the electric vehicle industry! Let's make this upcoming year the best one yet!