The Transition Toward Electromobility Is Unstoppable

The growing presence of hybrid and electric cars on the streets and highways of Mexico is unstoppable. The push comes from government agencies, from automakers and also from consumers, who have a growing interest in getting started in electromobility, but still encounter several barriers. For this reason, many see leasing as a way to test these types of units before deciding to buy. 

According to data from the National Institute of Statistics and Geography (INEGI), there are more than 58 million registered motor vehicles in circulation in Mexico. The same agency records more than 38 million cars that travel through the country's cities and highways every day, which is more than 103 million people who travel daily.  

This large volume is particularly relevant in urban areas with a high population concentration, such as the capital, where traffic congestion is increasing. In some cases, stretches that would only take 10 minutes by car can take up to two hours in Mexico City. This phenomenon can become a barrier to well-being and a deterioration in the quality of life of people in large cities.

In the 2024 edition of the TomTom Traffic Index, which analyses and evaluates the traffic in 387 cities around the world taking into account factors such as average travel time, fuel costs and CO₂ emissions, the Mexican capital is ranked 13th in the world among the most congested cities and, in the case of the American continent, is only behind Toronto, Canada, and Lima, Peru.

According to data from UN Habitat, Mexican cities suffer from serious environmental pollution problems, and the transportation sector is one of the main causes, contributing 20.4% of GHG emissions, of which 16.2% comes from the automotive sector, mostly from individual motorized transportation trips. In some metropolitan areas such as the Valley of Mexico, emissions generated by vehicles represent up to 60% of total pollution from coarse suspended particles (PM-10). 

For this reason, the sector and government agencies are promoting a gradual transition toward more environmentally friendly transport options, both in public and private transport. In 2024, the Chamber of Deputies approved the reform for the transition toward electric and hybrid vehicles in Mexico, which seeks to promote the gradual replacement of combustion vehicles with electric and hybrid alternatives in Mexican territory.

Pending Challenges

However, the sector has stated the main challenges facing this transition; such as the price of electric and hybrid units, which is higher than gasoline options, although this trend could be reversed due to the growing arrival of models from Chinese brands in this segment that are very competitive in terms of prices, as well as the increase in production of this type of vehicle.

Charging infrastructure is another area that could slow down or impede the transition, as there is still no national policy to promote it, nor is there the private capital needed to develop and expand it.

Still, we see that there has been an increasing adoption of electric and hybrid vehicles in our country. From January to September 2024, 85,766 electric, plug-in hybrid and hybrid vehicle units were sold, according to the National Institute of Statistics and Geography (INEGI), a figure significantly higher than the same period in 2023, when 48,745 cars were sold in this segment. That is, in the first nine months of the year, there was a comparative growth of 75.95%.

Of the total units sold in the country from January to September, green cars accounted for 4% of sales in 2022 (35,012 units), 5% in 2023 (48,745 units) and 8% this year (85,766 units). This increasingly prominent growth has also been reflected in the placement of cars for lease.

Regarding the volume placed by the Mexican leasing platform BitCar, in the first nine months of 2024, the percentage of electric and hybrid vehicles placed represents 16% of the total fleet. This figure is higher than in 2023 when the placement of green cars represented 14.5%.

These data show that vehicle leasing is positioned as an alternative for individuals who wish to venture into electromobility without assuming the associated risks, such as price or charging infrastructure. 

Benefits of Leasing Electric and Hybrid Cars

Leasing offers benefits for any user who wants to try an electric vehicle, such as savings on fuel and maintenance costs, not having to pay a down payment, and not having to bear the cost of depreciation since the owner is the lessor, while contributing to the reduction of carbon emissions, without committing to a definitive purchase. 

Not only does vehicle leasing offer financial flexibility, it also allows users to try out emerging technologies, such as electric and hybrid vehicles, and new car brands over a set period of time without worrying about their resale value. This is particularly valuable in markets like ours, where electromobility is in its growth phase.

From an environmental point of view, hybrid and electric cars allow unrestricted circulation, thanks to the fact that they are much more environmentally friendly compared to an internal combustion car. This is especially relevant in times of environmental contingency in the capital, where green units are exempt from the “Hoy no circula” (No driving today) program of the Ministry of the Environment of the Mexican capital.  

In addition to the lower environmental impact, a hybrid or electric car reduces the emission of polluting gases by between 100g and 80g CO2 per kilometer traveled, which significantly reduces the impact on the environment. 

They also represent savings. According to the Mexican Association of the Automotive Industry (AMIA), the annual cost of gasoline for a traditional car, which travels an average of 10,000km per year, with a performance of approximately 380km per tank (40 liters), is just over MX$14,000 (US$693). In the case of a hybrid car, the cost of gasoline would decrease by 68%, generating an annual fuel cost saving of over MX$9,000 on average. For an electric car, a great advantage is that it can be recharged overnight at home, making the savings more visible, at least 65 to 68%, which is around MX$9,500 pesos. 

Conclusion

Despite the challenges, the market is gradually moving toward electromobility. On the one hand, there is a growing trend of demand and, on the other, a greater supply with new models and brands that try to democratize access to these types of units. We need to be more forceful on the infrastructure side so that the transition is systemic and effective.