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Date: August 29, 2024
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By Lucila de los Santos
Latin America

EMA proposes differentiated subsidies for electric and hybrid vehicles in Mexico: “They don’t pollute the same”

In a context where Mexico is exploring options to promote electromobility, a question arises: if the government were to implement subsidies for electrified vehicles, how should they be structured to truly make a difference?
electric vehicles

Although the electrification of the sustainable vehicle fleet is advancing in Mexico, the real turning point lies in the need to distinguish between different technologies, so that any future incentives accurately reflect the environmental contribution of each.

The question is not just how many more vehicles would be sold, but what the real impact on emissions reduction would be. In a country where sales statistics for these vehicles are hard to come by, precise categorization of vehicles is more necessary than ever.

“It’s not the same to pollute less as it is to not pollute at all. A hybrid sold today will continue to pollute for the next 20 years, whereas an electric vehicle sold today will improve as power grids evolve towards more renewable energy sources,” says Eugenio Grandio, President of the Electro Mobility Association Mexico (EMA).

The idea is that if the government decides to offer subsidies, they should be tiered based on each vehicle’s capacity to reduce pollution.

In Mexico, we’ve seen cars marketed as electric, but they’re really 8-cylinder vehicles with an electric motor that drives them,” the executive points out during the International Mobility Portal Summit “Electric Vehicles: New Opportunities for Strategic Markets: Latin America and The Caribbean.

While an 8-cylinder mild hybrid that emits less CO2 than a four-cylinder vehicle might seem an attractive option, does it deserve the same level of support as a zero-emission car? The answer seems to be no.

For Grandio, incentives should be reserved for technologies that offer the greatest environmental benefit, encouraging consumers to choose vehicles that genuinely contribute to reducing pollution.

“We need to differentiate how much they really help,” insists the expert, referring to the need for more precise classification.

Necessary legislation in Mexico

It’s true that Mexico could become the hub of electromobility in Latin America, but to achieve this, public policies must be designed with precision.

Legislation needs to be sophisticated enough to place incentives on the technologies with the least environmental impact. Grouping all technologies together with the variety of systems that exist is no longer correct,” Grandio concludes.

It’s worth noting that with her historic victory, Claudia Sheinbaum not only becomes the first woman to hold the highest office in the country but also promises to make electric mobility a fundamental part of her government agenda.

In this context, the EMA president recounts: “I’ve had conversations with people working with the new administration, and there are experts who are aware that 8-cylinder vehicles won’t solve the environmental issue. The regulations need to be updated, and we need to look at the classifications of grams of CO2 per kilometre.”

Official projections

Mexico’s Secretariat of Energy (Sener) projects that by 2038, there will be 6.4 million electric vehicles in circulation.

This figure would equate to 35.1 percent of the total number of cars expected to be sold by then.

According to the Electric Sector Development Programme (Prodesen), prepared by Sener, with the incorporation of more electric cars on the roads, the installation of charging stations is also expected to increase to nearly 22,000 points.

Public Policies

The publication Latest Developments on Charging Stations for Electric Vehicles, released at the end of 2023 by the Mexican Institute of Transport (IMT), states that electric charging infrastructure must be in constant growth to support the increase in demand for this type of vehicle.

It also mentions that promoting electromobility requires the participation of various stakeholders at several levels; in addition, the sector and involved entities have called for the creation of efficient policies in several areas: tax incentives for vehicle purchases, infrastructure for charging stations, standards and regulations, development of a public charging network, energy demand management, among other actions.

Relive the International Mobility Portal Summit “Electric Vehicles: New Opportunities for Strategic Markets: Latin America and The Caribbean”

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