Mexico’s Auto Parts Industry Toward 2026: A Turning Point

As 2026 approaches, Mexico’s auto parts industry stands at a defining moment. Across production lines, engineering centers, and in the strategic decisions companies make every day, three forces are converging to shape the next era of North American mobility: the accelerating shift toward cleaner and more technology-driven transportation, the profound transformation underway in the global automotive supplier sector, and the upcoming USMCA review. These forces are not isolated trends. Taken together, they form the backbone of an industry preparing not merely to stay competitive, but to redefine its leadership in the region.

This transition is unfolding against what analysts describe as a period of “stagformation” — a convergence of stagnating global production volumes and rapid structural change. Worldwide, suppliers face shrinking margins, intensifying competition, and unprecedented technological requirements. Today, electrification and software-defined vehicle architectures are reshaping cost structures. In such an environment, the future will belong not to those who simply react, but to those who anticipate and lead.

Electrification is making the future tangible, and the data tells a compelling story. By the end of 2025, Mexico’s passenger EV market is projected to grow by 12.7%, surpassing 36,000 units. By 2026, EV penetration is expected to rise from 6.1% to 10.6%, reflecting the alignment of consumer preferences, financing conditions, and technology adoption. Yet, the significance of these numbers goes far beyond sales: they signal a structural transformation already visible on factory floors throughout the country.

In 2024, Mexico doubled its EV production to 220,000 units. American OEMs accounted for roughly 70% of this volume, accompanied by strong participation from Japanese and European manufacturers. These developments point to a deeper truth: Mexico has become an indispensable pillar of North America’s transition to electric mobility.

Trade dynamics reinforce this momentum. In 2024, Mexico became the United States’ largest EV trade partner, with net exports reaching 145,000 units. As companies electrify their fleets to meet ESG commitments, Tier 1 suppliers are modernizing production, expanding high-value capabilities, and investing in electrified powertrains, thermal management, lightweight structures, and electronic modules. Mexico is not merely accompanying the evolution of electric mobility, it is actively shaping the conditions under which it will advance.

This leadership rests on decades of capability building. Mexico is a global reference in seats and foam production and a regional leader in glass, plastics, interiors, and HVAC modules. These strengths form the foundation for the next phase of competitiveness, one in which manufacturing excellence must increasingly integrate engineering, electronics, and software to support the systems that will define future vehicles, including connectivity solutions, battery systems, and software.

Momentum is also evident in powertrain capabilities. While traditional innovation hubs continue to lead in high-value engines and transmissions, Mexico has consolidated its role as a regional center for driveline assemblies, castings, and mid-volume powertrain production. The shift toward electric platforms will require new materials, new design methodologies, and new forms of collaboration, opening investment opportunities that can significantly elevate Mexico’s technological profile.

Yet, the most decisive factor shaping 2026 is the upcoming USMCA review. More than a formal evaluation, it represents a strategic opportunity for the region to reaffirm its industrial vision. For Mexico, the review must provide greater investment certainty, align rules of origin with the realities of new technologies, deepen regional collaboration in batteries, electronics, and software, and strengthen the training systems that will prepare our workforce for emerging technologies.

Approaching the review with foresight and unity will allow North America not only to preserve the benefits of integration but to modernize the framework that will guide the industry’s transformation in the coming decade. As global competition intensifies — Asia is gaining ground, development cycles are faster, and EV adoption is expanding rapidly — the region’s ability to act as a coordinated, technologically integrated production platform will determine its long-term competitiveness.

The story of Mexico’s auto parts industry has always been one of evolution. From its early role as a component manufacturer to its current position as a global benchmark in several segments, the industry has consistently risen to new horizons. Today, the challenge is to complement our manufacturing strength with deeper engineering and technological capabilities. And the opportunity within reach is to become an ally in tech-driven and greener mobility in North America.

As we look toward 2026, one message stands out: Our future will be shaped not by external pressures, but by our capacity to lead with vision. Mexico has the talent, the industrial capabilities, the regional partnerships, the experience and the momentum to guide North America into its next era of mobility. On this journey, the National Auto Parts Industry Association (INA) remains a committed ally, fostering collaboration, strengthening skills, and championing the sector’s role as a pillar of regional competitiveness, firmly committed to the future of mobility.