The Mexican electric bus market was valued at USD 80.30 million in 2020 and is expected to reach USD 478.11 million in 2026 registering a CAGR of 31.62 % during the forecast period (2021-2026).
The outbreak of the COVID-19 pandemic impacted the growth as the country went through strict lockdown for a long period in 2020. Yet, with the gradual opening of economies, demand is returning to the market.
The electrification of the transportation sector has been critical in tackling the climate change that is predominant in the country. According to the International Energy Agency (IEA), in order to limit the average temperature rising to 2°C, reducing the country’s carbon footprint from the transport sector, which is responsible for 22% of yearly emissions, is expected to be critical for Mexico to meet its climate goals. The enactment of stringent emission standards across the country and upcoming launches by manufacturers are likely to drive more electric vehicle sales during the forecast period.
The driving factors for the market are increasing adoption of electric vehicles and buses in order to reduce the carbon footprints and improve the air quality and investments made by several global OEMs in the country because of the availability of low-cost labors and other tax benefits offered by the government is supporting the market.
Key Market Trends Increasing Adoption of Electric Buses
Fuel constitutes a major part of the operating cost of any vehicle. With the increasing costs of fuel, using an electric bus for public transport not only reduces the fuel cost but also reduces other upfront costs and total cost of ownership. By 2030, the prices for the electric bus are expected to come down to that of diesel fuel buses.
Electric buses help reduce 81-83% of the maintenance and operating costs, compared to a diesel-engine bus.
Electric buses offer more comfort to travelers compared to gasoline or diesel buses. The NVH levels in electric buses are minimal, unlike traditional diesel buses, providing enhanced comfort to passengers.
Currently, the Mexican market is one of the most promising markets in the world, and it is expected to lead the demand for e-bus over the forecast period. Mexico City is acting as a pioneer for this transformation, as its public transportation fleet is increasingly being electrified.For instance,
- In January 2020, Mexico added 63 electric trolleybuses to its public transportation fleet under the Trolebici project, which aims to improve transport and commuting infrastructure in Mexico City with an investment of nearly USD 35 million.
High Growth anticipated for the Battery Electric Bus Segment
Transit agencies across the country have been significantly adopting electric buses for public transportation. Mexico is expected to account for high adoption rates of battery-electric buses during the forecast period, owing to their on-going purchase orders for e-buses.
The governments in the country initiated numerous policies to promote electric vehicles, and to facilitate access to clean technologies in transportation with an aim to minimize exhaust emissions. For instance,
- In November 2020, the Mexican General Import and Export Duties Law modified through a couple of decrees to create tariff items that expressly identify electric passenger vehicles, used electric light vehicles and used trolleybuses within the Mexican nomenclature of goods, subject to general import duty rates of 20, 15 and 15%, respectively.
Not only the government but major automotive companies are also investing in the country. For instance, In September 2020, Volkswagen presented its Electric Mobility Program at an event in Silao, Mexico. The program targeted for the city of León consists of pilot testing of electric vehicles for cargo and personnel transport. The pilot program is being organized as the company introduces electric commercial vehicles, buses, and trucks.
Competitive Landscape The Mexico electric bus market is consolidated. The top global players account for most of the market share. The major companies in the?electric bus market include Daimler, BYD, Yutong, Zhongtong Bus, and King Long. Local companies, such as Advanced Power Vehicles are also tapping the market by converting IC buses to fully electric buses. BYD, the Chinese firm is testing its new 12m long electric bus, which will soon be integrated with 8m long model. BYD offers pure electric buses with range of 250 Kms. In Dec 2019, Yutong has delivered 40 electric buses which were tailor made for Mexico City public transport.
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