How Mexico is Leading the Charge in Electric Vehicle Production by 2026

In 2024, Mexico exported $3.127 billion in electric vehicles to the U.S., positioning itself as a significant player in the EV industry according to the U.S. Department of Commerce. This occurred in the first quarter of 2024. The report shows that if Mexico keeps growing, it could soon become a global leader in electric car exports.

Mexico now ranks above South Korea, Japan, Belgium, and the U.K. in EV exports, showcasing its rapidly growing presence in the global EV market. This shift further solidifies Mexico’s electric vehicle industry as a major player in the global EV market.

Major Players: Tesla, Ford, GM 

Mexico has attracted some of the world’s largest automotive manufacturers, including Tesla gigafactory in Mexico, Ford, and General Motors (GM). These key players are at the forefront of EV manufacturing in Mexico, helping to establish itself as a center for electric mobility.

• Tesla’s Monterrey Gigafactory is expected to boost EV production and key component manufacturing, including lithium batteries, underscoring Mexico’s growing role in sustainable technology.
• Ford manufactures its iconic electric Mustang in Mexico, further showcasing Mexico’s role in producing high-performance electric cars.
• GM is converting its plant in Silao to make electric vehicles. They are also building a new facility in Coahuila to increase their electric vehicle production.

These investments by Tesla, Ford, GM, and others reflect growing confidence inThese investments by Tesla, Ford, GM, and others reflect growing confidence in Mexico as a major EV manufacturing base.

Production Statistics and Projections

Mexico's shift from traditional auto manufacturing to electric vehicle (EV) production is accelerating rapidly. In 2023, EV production in Mexico surged to record levels, with over 100,000 EVs produced, supported by investments from major automakers like Tesla, GM, and Ford. Projections indicate that by 2026, Mexico’s EV production could exceed 300,000 vehicles annually, driven by strong demand in the U.S., Canada, and Latin America.

Supporting this growth, the Mexican government has implemented policies to promote charging infrastructure and incentivize EV production, aiming to position Mexico as a leading EV manufacturing hub. Mexico's access to lithium reserves also bolsters its capacity for growth, with plans to meet both local and international demand through sustainable production practices.

These projections show a promising future for Mexico’s EV sector, with continued support and infrastructure growth fostering long-term success in the EV market.

Key Investments in Mexico's EV Sector

Mexico has become a hotspot for EV industry investments, particularly in EV manufacturing facilities, charging infrastructure, and supply chain development. Notably, Tesla's charging stations in Mexico have been expanding rapidly to support the growing Mexican electric car market.

Investments are also focused on lithium-ion batteries, with Mexico positioning itself as a key player in the global lithium EV battery supply chain. Raw materials like lithium are essential for maintaining EV production and supporting battery pack manufacturing.

Chinese EV manufacturers are also making their way into the Mexican electric vehicle market, such as Jetour, which is taking advantage of Mexico’s strategic location and trade agreements to export EVs to the U.S. and Latin America.

Recent investments in the electromobility sector showcase the wide range of components and vehicles being produced in Mexico. Notable projects include:

	High-voltage battery production		Gigafactory
	Electric braking systems		EV auto parts
	Hybrid Tacoma model		EV switch components
	Electric motor manufacturing		Aluminum parts specifically for electric vehicles
	Electric minivan and pickup   production		Q5 hybrid production

Challenges and Opportunities

Despite the promising outlook, Mexico faces challenges, including the need for a more robust charging infrastructure. While urban areas are seeing growth in charging networks, rural regions are still behind. Expanding nationwide charging infrastructure will be crucial to support the broader adoption of electric vehicles.

Another challenge comes from the increasing competition posed by Chinese EV manufacturers, known for offering lower-cost EV models. This brings new competition for well-known brands like Ford, GM, and Tesla. It also gives Mexico a chance to diversify its EV manufacturing. Mexico can meet the growing demand for more affordable electric vehicles.

Infrastructure Development

To support the growth of the EV industry, Mexico is investing in charging stations and improving its logistics networks. Public and private sector efforts are joining forces to prepare the country for the rise in EV adoption.

For example, Mexico City and other densely populated cities are quickly adding more public EV charging stations. At the same time, private companies are creating fast-charging networks along important highways. This makes long-distance EV travel easier.

The development of EV lithium battery production facilities is part of Mexico's larger infrastructure plan. A steady supply of batteries is essential for maintainig EV production and reducing reliance on imports.

Mexico's EV Workforce Considerations

Mexico’s EV workforce is one of the country’s greatest assets. With decades of experience in the automotive sector, the transition to electric vehicle production has been relatively seamless. The workforce's knowledge of advanced manufacturing techniques has helped companies adapt quickly to the specific needs of EV manufacturing.

As the industry changes, there will be a greater need for training programs on EV technology. These programs should cover battery assembly, electric motor production, and software integration. By investing in workforce development, Mexico can attract valuable investments. This will help it stay competitive in the global EV industry.

Trade Agreements: USMCA

The USMCA trade agreement has been a crucial factor in Mexico’s success in the electric vehicle market. Mexico offers duty-free access to the U.S. and Canadian markets. This makes it a great choice for companies wanting to expand EV manufacturing and keep costs low.

The USMCA has incentivized local production of EV components like battery packs, reinforcing Mexico’s role in the North American EV supply chain and making the country an increasingly important player in the global EV market.

Raw Materials: Lithium

Lithium is a critical resource for EV lithium batteries, and Mexico holds significant lithium deposits. By investing in the extraction and processing of this resource, Mexico can rely less on imported materials. This will help Mexico become a bigger player in the global EV battery market.

International Competition: Chinese Manufacturers

As Chinese EV manufacturers increasingly enter the global market, Mexico faces competition but also new opportunities for collaboration. Chinese companies, known for making affordable electric vehicles, want to set up factories in Mexico. They aim to benefit from Mexico's strategic location and trade agreements.

This competition could spark new ideas and may push companies like Ford, GM, and Tesla to improve efficiency and cut costs. With strategic investments in infrastructure, government support, and workforce development, Mexico is positioned to shape the EV landscape significantly by 2026.

Ready to explore EV manufacturing in Mexico?

If you’re considering expanding your EV manufacturing operations to Mexico, partnering with an experienced company can be your advantage. With Co-Production International (CPI), you’ll have a team that understands the nuances of setting up and scaling EV production in Mexico. From finding the ideal location to managing regulatory compliance and building a skilled workforce, we handle every detail so you can focus on production and growth.