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Analysis of Electromobility in Six Countries— Where to Invest Next

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Electromobility in Mexico

Demand in Mexico

Sales of electric and hybrid vehicles in Mexico are still extremely low. In the first three quarters of 2017, a total of 7,283 electric passenger cars found a buyer. Sales were divided into 7,086 hybrids and 197 electric cars. This corresponds to only 0.7 % of total passenger car sales. Guillermo Rosales, deputy managing director of the automobile dealer association Amda (Asociacion Mexicana de Distribuidores de Automotores), expects sluggish sales in the coming years: "We expect annual sales growth of around 20 %. However, this means that the share of total sales will continue to lag behind industrialized countries such as the USA." Rosales sees the main reason for this still higher price. "The average price for a new car in Mexico is around € 14,000, which is far below the price of electric vehicles," the expert points out.

BMW together with Siemens, however, held an event on electromobility in Mexico City in September 2017. In various workshops, the participants developed a series of proposals on how to better promote e-vehicles. In December, these proposals were presented to the Ministry of the Environment under the title "Agenda 2020". In Mexico, there is no direct subsidy for the purchase of electric or hybrid vehicles, and the state is more likely to opt for indirect subsidies based on tax cuts. For example, there is no tax on new vehicles and owners of such vehicles do not pay any motor vehicle tax. Imported electric cars have been exempt from import tax since February 2017.


Production in Mexico

Mexico is the seventh largest automobile manufacturer in the world. Among the major car manufacturers, however, only Ford has plans to build electric vehicles in Mexico. As became public in December 2017, the company plans to start manufacturing a small SUV at its plant in the Estado de Mexico in 2020. The model was originally designed for production at the Ford Flat Rock plant in Michigan. In the future, however, the development and production of autonomous vehicles is to be pushed ahead there, which is why the electric model will move to Mexico. In addition to the conventional versions of the Q5, Audi is also planning to assemble a hybrid version in Mexico. The plant, which was opened in Puebla State in 2016, is currently preparing for this step. The factory has an annual capacity of 150,000 vehicles.

Although the Mexican automotive industry is dominated by foreign companies, there are some domestic approaches to electromobility. Motores Limpios launched the two-seater Zacua in mid-2017. Weighing 380 kilograms, the vehicle has a range of 195 kilometers and a maximum speed of 95 km/h. Moldex, a subsidiary of the bakery giant Bimbo, announced that it was developing an electrically powered taxi model together with the Mexican company Giant Motors. It is to be launched in 2018.

Vehiculos Electricos Corporativos (VEC), another Mexican company, is developing electrically powered commercial vehicles. Together with the Universidad Autonoma Metropolitana (UAM), the company presented the prototype of a transport vehicle at the beginning of 2017. Its battery only needs 60 minutes to be charged and offers a range of 100 kilometers. The sales price of approx. € 30,000 is low compared to other commercial e-vehicles. There is no information about the exact date for its market launch.

Infrastructure in Mexico

In Mexico, sales of electric and hybrid cars are only slowly gaining momentum. The charging infrastructure is relatively well developed, but strongly concentrated in the capital region. Mexico's largest network of charging stations (Chargenow) offered a total of 434 stations in February 2018. Most of the stations are located on plots of land belonging to hotels, shopping centers and individual shops. Chargenow is a cooperation between Nissan, BMW and the state-owned power company CFE, which is currently installing 30 stations. The charging technology of the Chargenow network comes from Schneider Electric and General Electric. Most loading units are open to the public and can be used free of charge.

Tesla, the US carmaker, operates the second largest network of charging stations in Mexico. The company offers around 410 charging stations nationwide, which are also mainly located at hotels and shopping centers. To what extent the Mexican charging infrastructure will expand is still uncertain. "We expect the charging network to be expanded in line with demand," says Guillermo Rosales. According to Rosales, however, this means that more battery-powered vehicles will have to be sold first, which in turn depends on whether manufacturers can reduce their prices.

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This article was first published by Next Mobility