The automotive industry in North America has undergone several changes since Donald Trump’s presidential campaign . In recent months alone, several modifications have been made, mainly to electric vehicles, which has affected the transition to electromobility.
Anuar Méndez, Associate Director of Research & Analysis at S&P Global Mobility, mentioned that this has caused a considerable increase in prices, as well as a contraction for the sector; however, uncertainty will continue until the review of the United States-Mexico-Canada Agreement (USMCA) is carried out.
During the panel “Policy, Production and Propulsion Systems: Vehicle Sales and Production in North America” , held within the framework of Automotive Logistics & Supply Chain, he indicated that amid a volatile business climate, automotive electrification will continue, but at a slower pace than anticipated a year ago.
“We see a more stable industry, without regulations, and customers in the United States will continue to have more affordable options to buy, which is somewhat balancing the effect of uncertainty with gasoline and hybrid vehicles,” he explained.
He mentioned that in Canada there are also repercussions from US policies , which have affected consumer confidence in that country.
Furthermore, there is an uncertain outlook for zero-emission vehicles given what the United States is doing on this issue.
“As the United States contracts its supply and production of electric vehicles, it’s having implications for the Canadian industry. Incentives will no longer be available starting in January, impacting electrification efforts, which are being reduced or eliminated. Furthermore, automakers are realizing how difficult it will be to bring electric vehicles to this country and are changing their strategy to have a more diverse portfolio, but it’s uncertain,” he emphasized.
In that regard, he stated that despite the end of incentives in Canada, electrification will continue, but it will be more gradual and will shift towards gasoline-powered vehicles, hybrids, and plug-in hybrids.
He pointed out that in Mexico this alternative is progressing more slowly , and Chinese brands are pushing the change, but “that path to electrification will take time,” and there are few regulations for this segment and no incentives, only tax deductibility.
“We have seen in the industry how Chinese vehicles have disrupted the established pattern of a stable industry. In less than five years, we have seen more than 20 brands enter Mexico. Regarding consumer availability and the openness to buying a new vehicle, we see accessibility with low payment options,” he noted.
He recalled that during 2019 there was a market share of Chinese brands of 0.8%, while during the pandemic, due to their availability, even more began to arrive so that by August of this year the share was 16.9%, surpassing other companies of the same origin .
“Without a regulatory framework and without incentives for electrification, Mexico will lag behind North America’s growth in electric vehicles; vehicle accessibility will be determined by the use of gasoline, and we project a 5% market share for the country in this segment by 2030, while Chinese vehicles will be the preferred option,” he explained.
Given this scenario, he considered that to accelerate the transition in the country, the Mexican government should, as in the United States and Canada, implement feasible deductions for the industry and regulate electrification along with an incentive program.
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