Mexico is the sixth-largest passenger vehicle manufacturer in the world, producing 3.7 million cars, and the fifth-largest producer of autoparts worldwide with USD 99 billion in annual revenues. The sector employs over 1 million people throughout the country.
The Electric Vehicles (EV) market in Mexico is at an early stage of development and there is no defined national legislation for electric vehicles or buses. Last week legislators, led by Indira Kempis, began work on the country’s first Electromobility Law which considers infrastructure and incentive issues for those looking to acquire an electric vehicle in Mexico.
A Director at the Mexican Association of Automotive Distributors (AMDA) explained the local context, “There is no national policy agenda for electric vehicles, especially since President [Andrés Manuel López Obrador] AMLO has reinforced a centralised energy policy based on oil and gas.”
“There is no national policy agenda for electric vehicles, especially since President AMLO has reinforced a centralised energy policy based on oil and gas.”
Director, Mexican Association of Automotive Distributors
Despite this, several states have been pursuing an electrification strategy outside the national agenda, as a state official reported, “Mexico City has launched its Electromobilisation Strategy: 2018 – 2030, which was prepared by C40 Cities Finance Facilities (CFF) in collaboration with Carbon Trust Mexico. Working with the state government, Volvo Buses has begun testing its first fully electric bus on line 4 of the Metrobus system in Mexico City, to provide electromobility technology under the #CiudadCero concept (CityZero) aimed at offering an innovative solution for sustainable mobility.”
“Working with the state government, Volvo Buses has begun testing its first fully electric bus on line 4 of the Metrobus system in Mexico City.”
State official, Mexico City
But this has not been enough to attract foreign investment in the sector. An executive of the National Association of Truck, Bus and Tractor Producers (ANPACT) gave a high-profile example, “Consider the state of Jalisco, it recently lost the opportunity to host a Tesla assembly plant. The company appreciated the efforts of the state government, but given the federal uncertainty and AMLO’s regressive policies, they decided to move their investment to Austin, Texas. Jalisco is not an automotive hub, but it has an important cluster of electrical component companies with investments in new technologies. That is what attracted Tesla, but its withdrawal has meant others such as Volvo, Nissan and VW won’t invest either.”
There are also a number of nationwide concerns that are proving to be significant barriers to the adoption of electric vehicles. The AMDA director summarised, “Most importantly, there is not enough money to finance the required infrastructure. Secondly, there is no political will at the national level. Third, in terms of electrifying public transport, you must understand that the sector is run by concession and the government itself is afraid to upset certain concessionaires who are against electrification and the associated cost. Finally, there are many other concerns such as the difficulty and cost of battery recycling and battery theft.”
It seems like there is still much to do before EV adoption can really take off in Mexico, starting with a change of government!