Mexico Will No Longer Export ICE Vehicles to the EU From 2035

Yesterday, EU’s Member States adopted a common position on the “Fit for 55” package that aims to align EU’s public legislation with the climate goals of the Council and the European Parliament. The agreement aims to introduce 100 percent of CO2 emissions reduction targets by 2035 and bans sales of new vehicles powered by fossil fuel starting in that year. This rule will force Mexico to adjust its technology to continue exporting vehicles to the EU market. Italy, Portugal, Slovakia, Bulgaria and Romania want to delay this plan by five years. 

“The achievement, led by the French Presidency, of an agreement between the member states on the 'Fit for 55' package is a crucial step in attaining our climate objectives within the main sectors of the economy. The ecological and energy transition will require the contribution of all sectors and all member states, in a fair and inclusive manner,” said Agnès Pannier-Runacher, French Minister for the Energy Transition.

This package raised the targets for reducing the CO2 emissions of new cars by 55 percent and of new vans by 50 percent by 2030. It also includes the deployment of an alternative fuels infrastructure to ensure drivers can recharge their vehicles across the EU. The EU accounts for 46 percent of total global EV sales and is the region with the most fully electric plug-in vehicles, as reported by Bloomberg.

The Fit for 55 package also establishes a Social Climate Fund to support vulnerable households, transport users and micro-enterprises to boost the creation of an emission trading system for the road transport sector. “Each Member State would submit to the Commission a ‘social climate plan,’ containing a set of measures and investments to address the impact of carbon pricing on vulnerable citizens,” says the Council of the EU.

In 2021, Mexico exported over 88,000 vehicles to the EU. If the country wants to continue exporting its units to this market, it has to adapt its production lines and expand its EV offering.

“The latest numbers show that 4,402 units of hybrid and electric vehicles were sold in March 2022. This represents an increase of 9 percent compared to the same month last year,” said José Zozaya, President, Mexican Association of the Automotive Industry (AMIA), to Publimetro. However, EVs only represent 2 percent of the units manufactured in the country, he added.

Mexico’s automotive industry is collaborating to speed up the transition to electromobility, but it needs the collaboration of local authorities. Recently, President Andrés Manuel López Obrador committed to fight climate change, especially in the automotive industry. However, some of Mexico’s automotive and industrial organizations have highlighted that incentives are needed to achieve electromobility goals. AMIA, for example, proposed the creation of a comprehensive public policy alongside the federal administration for the development of electromobility in the country, as reported by MBN.