With Tesla Inc’s plan to open a $5 billion Gigafactory in Mexico, the country should soon become a hub of electric vehicle (EV) production, but the zero emissions cars remain too expensive for most Mexicans and they are impractical to drive in much of the country, which lacks enough charging stations.
Mexico has made reviving fossil fuel output a priority under President Andres Manuel Lopez Obrador, frequently giving short shrift to investment in renewable power sources.
But it also has lofty ambitions to boost EV ownership as Tesla gears up to develop its factory in the northern border state of Nuevo Leon. General Motors Co, Ford Motor Co, BMW and Volkswagen’s Audi unit also are producing EVs in Mexico, or plan to. And Mexico also has at least one home-grown EV-maker, the unlisted Zacua.
Foreign Minister Marcelo Ebrard, a leading contender to be Mexico’s next president, said the government wants EVs to account for half of all cars sold domestically by 2030. Officials said that goal includes all zero emission vehicles, including hybrid and hydrogen-powered autos. Even so, it will take a lot of work to get there.
EVs made up just 0.5% of domestic auto sales last year, according to Mexico’s Auto Industry Association AMIA, far below the U.S. percentage of 5.8%, according to research firm Motor Intelligence. If hybrids are added, Mexico reaches 4.7%.
“There are still a number of issues that need resolving in Mexico before there’s a massive influx of electric cars,” said Mario Hernandez, KMPG’s lead manufacturing partner in Mexico.
Hernandez said drawbacks included a lack of subsidies for buyers, high costs for installing charging devices at homes and a shortage of public charging stations, vital for longer journeys. Unlike other countries, Mexico has not yet agreed on a plan to phase out gasoline-powered vehicles, he added.
Nearly 1.1 million new cars in total were sold in Mexico last year. Just 5,600 of those were EVs, much less than the 8,400 sold in Latin America’s biggest car market, Brazil.
TYT Newsroom
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