It’s official. Mexico’s Plan decrees an 86% tax deduction for electric and hybrid vehicles.
The recent publication of the decree outlining the scope of Mexico’s Plan establishes fiscal incentives to promote the electric and hybrid vehicle industry. The tax deduction percentage depends on the type of asset being acquired.
As announced by President Claudia Sheinbaum when publicly presenting this economic stimulus package for the upcoming presidential term, the electric vehicle and low-emission sectors will be key players.
The decree, which emphasizes the goal of encouraging “private sector actions to secure investments, generate jobs, and promote regional development… and to support projects through mixed investment schemes and infrastructure,” also stipulates “a fiscal stimulus consisting of an additional deduction for expenses related to these sectors.”
According to the official text, “the stimulus consists of the option to make an immediate deduction on investments in new fixed assets purchased from the date of entry into force of this decree until 30th September 2030, deducting in the fiscal year in which the investment is made, the amount resulting from applying the original investment amount.”
These incentives will not apply to “vehicles powered by internal combustion engines and vehicle armouring equipment,” the decree specifies.
Fiscal Incentives for Electric Vehicles under Mexico’s Plan
In a detailed analysis of this new regulation, which includes a range of measures aimed at boosting electric mobility, actions that promote the purchase and use of electric, hybrid, and hydrogen-powered vehicles are highlighted.
These measures align with a clear policy targeting the definitive decarbonisation of Mexico’s vehicle fleet.
These measures, which aim to accelerate the energy transition and position Mexico as a regional leader in the eMobility sector, will offer the following fiscal incentives:
- For cars powered by rechargeable battery electric propulsion, electric motors that also include an internal combustion engine or hydrogen-powered motors, buses, trucks, trailers, forklifts, and semi-trailers: 86% deduction for vehicles purchased in 2025 and 2026, and 83% for those acquired between 2027 and 2030.
- For conventional bicycles, and bicycles and motorcycles powered by rechargeable battery electric propulsion: the same deduction percentages and periods as the previous case.
It is also important to note that the regulation further specifies: “The total amount of the fiscal incentives that will be authorized to taxpayers will be up to 30 billion pesos distributed from the entry into force of this decree until 30th September 2030,” with different scales depending on the activities and assets specified in the decree.
Additionally, for these eMobility assets (outlined in Article 1 of the decree), the incentive “will only be applicable to investments that taxpayers maintain in use for a minimum period of two consecutive years following the fiscal year in which the immediate deduction is made.”
Potential Impact of the Fiscal Incentives on the eMobility Sector
The governmental measures outlined in Mexico’s Plan were highly anticipated by entrepreneurs and promoters of electric mobility in the country.
Leonardo Beltrán, a specialist in the field, shares with Mobility Portal Latin America: “I think, in terms of political narrative, the Sheinbaum administration has been very positive because one of the pillars it’s pushing is precisely electrification, particularly in transportation.”
“In terms of data, last year we sold many more electric vehicles than the year before, which shows a growing trend in the domestic market. This is clearly linked not only to incentives or fiscal stimuli but to the competitiveness of the technology of electric and hybrid vehicles, which, under equal conditions, are much cheaper, even including daily operation, compared to internal combustion vehicles,” he adds.
He exemplifies: “If we add to these innovations the fact that in Mexico City there is a ‘Hoy No Circula’ scheme, where internal combustion vehicles, if not new, have some restrictions, they practically have to leave their car at least one day a week. This directly impacts consumers of such vehicles.”
“Therefore, regarding electric mobility, I would say that the narrative is aligning with market dynamics and what’s happening internationally, for example, in terms of climate change. In summary, it makes the development of the eMobility industry in Mexico much more promising,” concludes Beltrán.
