Mexico Hikes Car Import Tariffs to 50% for Non-FTA Markets

This week in automotive news: Mexico has increased import tariffs on passenger vehicles from 20% to 50% for countries without free trade agreements (FTAs), seeking to protect an estimated 350,000 industrial jobs while bolstering domestic manufacturing. Meanwhile, President Claudia Sheinbaum announced that Mexico’s domestically produced Olinia EVs will be launched in June, ahead of the 2026 FIFA World Cup. Meanwhile, Chinese demand for batteries used in new energy vehicles is expected to fall sharply from the end of 2025 into early 2026, according to Cui Dongshu, Secretary General, China Passenger Car Association.

More news below:

Mexico Boosts Car Import Tariffs to 50% for Non-FTA Markets

Mexico has increased import tariffs on passenger vehicles from 20% to 50% for countries without free trade agreements, a strategic move approved by the Senate on Dec. 10. The new duties, which take effect Jan. 1, 2026, target imports from nations including India and China and are intended to protect an estimated 350,000 industrial jobs while bolstering domestic manufacturing. The tariff hike comes as North American partners prepare for the first joint review of the USMCA on July 1, 2026. This review will assess the effectiveness of the agreement’s 75% regional value content (RVC) requirements in promoting regional production.

Olinia to Debut During FIFA World Cup: Sheinbaum 

Authorities say that a pilot fleet of Olinia vehicles is expected to be introduced in June 2026, ahead of the FIFA World Cup. According to President Claudia Sheinbaum, Olinia is a “minivehicle” designed for neighborhood-level mobility, with a maximum speed of up to 50km/h. The project includes two main models: one for passengers and another for work-related uses such as last-mile deliveries. 

China Lithium Battery Demand Seen Falling in Early 2026

According to Cui Dongshu, Secretary General, China Passenger Car Association, Chinese demand for batteries used in new energy vehicles is expected to fall sharply from the end of 2025 into early 2026. The anticipated downturn is linked to the phasing out of tax incentives for vehicle purchases, a slowdown in battery exports, and a pull-forward effect caused by buyers accelerating purchases to capture subsidies. According to Cui, sales of green passenger vehicles are expected to fall by at least 30% in early 2026 compared with the fourth quarter of 2025, with EVs used for commercial purposes “definitely” seeing a sharp decline in the same period. 

Guanajuato Auto Parts Exports at US$23 Million Despite 3Q25 Drop

Guanajuato’s automotive supply chain is expected to close 2025 hitting US$23 billion in auto parts exports, even as official data show a sharp contraction in transportation equipment exports during the third quarter of the year. Industry leaders and government statistics point to a year of consolidation rather than growth, shaped by external pressures, cost volatility, and a transition toward higher value-added manufacturing. Even with the decrease, Guanajuato maintained its position as the second-largest exporter of transportation equipment nationwide. Coahuila ranked first with US$11.67 billion, San Luis Potosi placed third with US$4.56 billion, Chihuahua fourth with US$4.45 billion, and Nuevo Leon fifth with US$4.44 billion.