Mexico makes lots of electric cars, but few Mexicans drive them

By Aida Pelaez-Fernandez

Electric cars are becoming commonplace in Mexico’s automobile industry. General Motors Co, Ford Motor Co, BMW, Zacua, and Volkswagen’s Audi unit all either produce electric vehicles (EVs) in Mexico, or have plans to. Tesla Inc is set to join the party by launching a $5 billion Giga factory in the northern border state of Nuevo Leon. Yet, the Mexican people seem hesitant to buy EVs, which are prohibitively expensive for most locals, and given the scarcity of charging stations around the country, impractical to drive.

Despite President Andres Manuel Lopez Obrador’s commitment to boost EV ownership in the country, there is a lack of support for the EV industry in Mexico. “There are still a number of issues that need resolving in Mexico before there’s a massive influx of electric cars”, said Mario Hernandez, KPMG’s lead manufacturing partner in Mexico. High prices and low stock of public charging stations are some of the main issues concerning the people of Mexico. According to Mexico’s Auto Industry Association AMIA, EVs made up only 0.5% of domestic auto sales in 2020, with hybrids pushed the figure up to 4.7%.

Foreign Minister Marcelo Ebrard has stated that the government’s goal is for EVs to account for half of all domestically sold cars by 2030. However, this remains a lofty ambition without government incentives to encourage the Mexican people to buy EVs. José Zozaya, AMIA Executive President, believes there is insufficient governmental backing to increase EV sales. “A real government incentive scheme would be necessary to really accelerate adoption of electric vehicles”, said Nazareth Black, the CEO of Zacua.

While countries across Latin America have included EV targets to reduce emissions, Mexico has shied away from such pledges, focusing instead on reviving its fossil fuel output. Additionally, Mexico lacks the necessary charging infrastructure to make EV driving practical, with only 1,100 nationwide charging stations, most of which are concentrated in Mexico City and other populous areas. Meanwhile, New York state alone boasts 9,000 charging stations, the governor’s office reports.

Pedro Corral, director of EV charging stations platform Evergo, states that while he drives his electric i3 BMW inside the city, he switches to a fossil-fuelled Toyota for longer drives outside of the city, citing range anxiety as a major issue. Many Mexicans share similar concerns, unable to justify the significant expense when cheaper, more flexible alternatives exist. Tesla’s cheapest EV costs approximately $55,000, and requires an expensive charging system, whereas a vehicle like the Nissan Leaf costs similarly, at over $50,000. Zacua’s two-seater electric car costs roughly 600,000 pesos ($31,767).

It remains to be seen whether Tesla’s new Giga factory will kick-start a surge in EV sales. However, the prohibitively high costs, shortage of charging infrastructure and range anxiety mean that much work is needed to make EVs more appealing to the Mexican people.

($1=18.8870 Mexican pesos)

(This story has been refiled to say KPMG, not KMPG, in paragraph 6)

(Reporting by Aida Pelaez-Fernandez, additional reporting by Daina Beth Solomon and Diego Ore; Editing by Dave Graham and David Gregorio)

Colleges and universities are prioritizing diversity, equity and inclusion.

Big tech colludes with Democrat senators and congressmen to censor One America News, violating the Constitution’s First Amendment.

The Federal Reserve meets to discuss the tough decision of raising interest rates again, and by how much.

Join Daniel Horowitz for the day’s hard-hitting news.

Nvidia Corp’s CEO lays out plans for the company to make the powerful and…

As crisis stalks traditional investments, bitcoin has suddenly emerged as a popular alternative.

Intel Corp’s chief architect is leaving the company to start his own venture to loosen restrictions from chip makers like Intel.

Google suspends the Play version of PDD Holdings Inc’s app Pinduoduo, after security concerns emerge around malware issues.