Infrastructure, Consumer Readiness Underpin EV Takeoff

Mexico’s emerging electric vehicle (EV) market has continued to grow, seemingly with greater interest at the federal level, which introduced several incentives to boost their rollout. These policies have served to signal to the private sector a willingness to support the successful rollout of EVs, despite important barriers including limited supporting infrastructure and little certainty on returns, according to industry leaders. Nevertheless, Mexico counts with a strong underlying network infrastructure, so “investors should keep an eye on this as a developing opportunity,” according to ARCADIS. 

“Mexico will be an important part of international electromobility and will continue to spearhead the Latin American automotive industry,” said Mark Sánchez, President, National Association of Electric and Sustainable Vehicles (ANVES).

Electromobility is a rapidly advancing trend being pushed by governments across the world, as they strive to address one of the greatest contributors of greenhouse gas emissions: transportation based on internal combustion engine (ICE) vehicles. In total, ICE transport accounts for 21 percent of global carbon emissions, which makes it the largest emitting sector in many developing countries, according to the World Economic Forum. In the face of recurring and increasingly devastating extreme weather events, this data has helped propel a public-led interest towards tackling transport emissions. The proliferation of incentivizing EV policies has marked the beginning of Mexico’s “inevitable” transition towards electromobility, but its realization will require public-private collaboration, as reported by MBN.

ANVES has been working with the private and public sector at the local and federal level to establish an official standard for the conversion of ICE vehicles into 100 percent EVs. This is a primordial step because “a challenge to the expansion of mobility electrification is that combustion cars remain more affordable than electric vehicles,” said Enrique Mendoza, General Manager, Beat Tesla. 

Throughout this negotiation process, the federal government needs to rush the development of the National Electric Mobility Strategy in order to eliminate the decision barriers that limit the acquisition of an EV, said Arcadis Global EVCI Market Report 2022. Central elements of a successful EV rollout include the development of supporting infrastructure like EV charging infrastructure (EVCI) and consumer education campaigns to encourage their participation, according to industry leaders.

​"In Mexico we need a cultural change that allows us to lose our fear of EVs and to trust in technological advances," said Alfonso Reyes, Director General, ZF Powertrain Modules Saltillo SA. 

Despite a concerted effort to bridge the electrification gap on behalf of public and private players, there are still extraneous elements that threaten to hamper Mexico’s intended transition, such as its limited access to raw materials. Over the past three years, manufacturers have been affected by the disruption of the production and distribution of raw materials like steel and lithium in China and Russia. While there have been efforts to reorganize global supply chains with the adoption of technology applications, sustained complications threaten to curtail “the electrification wave down drastically from one moment to the next,” said Mauricio Rosales, Carbody Sales Manager IQS-MX, Zeiss Mexico. Nevertheless, confident in the market’s self-correction, private players have mobilized to capture this growing market through the production and offer of EVs in different segments. 

“EV supply is growing in different segments, offering more accessible options for diverse purchasing powers,” said Reyes.

Within this early market space, Mexico’s “premium segment is the one buying more EVs. These are the brands that have managed to bring more fully electric vehicles to the market,” said David Zambrano, Operations Director, Maserati México and Rolls-Royce Motor Cars México.