Mexico's Electric Vehicle Potential: 4.7 Million Units by 2030, Driving Real Estate Market Growth

Mexico's potential as a major electric vehicle developer is on the rise. Over the next seven years, the National Autoparts Industry (INA) estimates that nearly 4.7 million electric vehicles will be produced nationwide, and an increase in electric vehicles production as a proportion of Mexico's total vehicle manufacturing, from 4.08% in 2023 to 23.9% by 2030. This growth is expected to drive Mexico's commercial real estate market development, with the automotive sector occupying nearly a third of the industrial gross leasable area (GLA), according to SiiLA Market Analytics.

So far, Mexico is home to at least 11 companies involved in or planning to start manufacturing electric vehicles and/or parts related to this industry. These companies include Chevrolet, Defenture, Dina, Moldex, Questum, WTech, and Zacua, in addition to Ford, General Motors, Kenworth, and Stellantis, which already occupy approximately 2.3 million square meters in Mexico, according to SiiLA.

In the coming years, an initial investment of at least $13 billion is expected from companies interested in the Mexican electric vehicle sector. Besides General Motors, WTech, and Stellantis, companies such as BMW, Bombardier, BYD Auto, CATL, LG Magna, Link EV Electric Vehicles, LS e-Mobility Solutions, Navistar, Nemak, PPG, and Tesla have announced plans to invest in Mexico, primarily in the states of Coahuila, Durango, Jalisco, Nuevo Leon, Puebla, Queretaro, and San Luis Potosi. Notably, 95% of the industrial space occupied by vehicle and parts companies is in Mexico's Northern and Bajio regions.

The vehicle and parts industry holds significant importance for Mexico. This productive segment generates approximately 20% of the manufacturing sector's economic impact, accounting for around 3.5% of the national GDP. Over the past three years, it has doubled its industrial footprint, currently exceeding 21.1 million square meters, as reported by SiiLA Market Analytics and INEGI.

Strengthening Mexico's electric vehicle industry is crucial for two main reasons. Firstly, the largest global consumer market, the United States, has announced that by 2030, 50% of its automotive revenue will come from electric vehicle sales. And according to the INA, over 21% of a USA-made car's value is Mexican. Secondly, there is the expectation that by 2050, over half of the vehicles worldwide will be electric. In line with this, Mexico's Economy Secretariat's data indicates that the vehicle sector has accounted for an average of 24% of Mexico's export GDP over the past decade.

During the past two years, the vehicle and parts sector absorbed over 1.3 million square meters in Mexico, representing an actual increase of 7%, as reported by SiiLA. The growth expectations for the next decade are even greater, driven by the demand for electric vehicles, nearshoring trends, and the need for technological innovation in North America. It is projected that during this period, the vehicle and parts sector will absorb a minimum of seven million square meters.

To learn more about this and other industries nationwide, explore REsource, Mexico's leading platform for commercial real estate news and information, where you can find content and analysis on events and trends. For further details, contact us at contacto@siila.com.mx.