Automotive manufacturers headquartered in the US and Europe were widely reported as at the “end of EV euphoria” in 2025, writing down and pivoting investments in EV production due to slower-than-expected sales.
A lot of this is related to the behavior of governments with subsidies– in the US, subsidies and incentives for EV drivers were withdrawn, and of course in China the production boom is subsidized by the government there. In Europe’s case, sales are more affected by the latter but also by Chinese automotive’s speed in bringing new designs into production. This was observed in last year’s book Apple in China by Patrick McGee, discussing how EV production imitates that of cell phones; or for a shorter read, [European] Carmakers copy China to get new models on the road faster was published in December in the Financial Times.
But what does this mean for Mexico, where European, US, Japanese and Korean carmakers keep opening up new production lines, even as they allow other legacy lines to close down? For the time being, Mexican automotive production is geared overwhelmingly for passenger vehicles to be exported to the United States. So the entry of Chinese vehicles for Mexican drivers affects the actual production and investment much less than it has in Europe.
What we actually see is the companies investing in factories that are versatile enough to do combustion, hybrid and EV cars.
BMW — San Luis Potosi EV conversion
- Confirmed investment to produce Neue Klasse EVs (including iX3)
- Battery module assembly included
- Real capital deployment, but still the conversion of an existing plant, not net new capacity
General Motors — Ramos Arizpe expansion
- Continued EV production ramp (Blazer EV, Equinox EV)
- Additional supplier and component investments tied to EV transition
- Follow-on investment to an existing EV hub
Stellantis — Saltillo electrification
- Investments tied to EV trucks/vans (RAM EV platform)
- Platform transition spending: keeps existing footprint relevant rather than expanding total capacity
Plant flexibility is a risk-management decision first– the automotive companies are hedging their bets. However it has a secondary strategic benefit: it makes it easier for OEMs to adjust product mix and respond to faster design cycles, which are becoming more important competitively.
Automotive companies assembling electric vehicles in Mexico, current and planned 2024. Source: Cluster Industrial
Below are some basic numbers and facts.
- Mexico produced about 3.9 million passenger vehicles last year (2025), and exported 3.4 million of them, 99 percent of those to the US. This was less than a 1 percent drop from 2024, which was a record year.
- Mexicans in 2025 purchased about 1.6 million new vehicles. 600,000 produced in Mexico, and another 1 million imported.
- By value of the finished new vehicles, 29 percent of the imports came from China in 2024, and another 25 percent from the US. This likely means a higher percentage of actual vehicle units imported from China.
- Chinese vehicles imported by Mexico are not just BYD, MG and Changan. General Motors, Volvo, Volkswagen and other Western brands produce vehicles in China for sale in Mexico.
- Of the 37 passenger assembly plants in Mexico, the brands are virtually all from Japan, Korea, Germany and the US.
- None are Mexican, unless you count the JV of one “completely knocked down” production plant between China’s JAC and Carlos Slim, though some Mexican (EV) production sites are in the works.
- Mexico in 2024 became the “#1 source” of foreign-manufactured EVs sold in the US: 145,000 that year, worth over 8.2 billion USD. Mexico nationally produced 220,000 that same year, implying about 75,000 were sold domestically.
- Electric vehicles bound for the US that Mexico produces include the Audi Q5; Chevrolet’s Equinox EV and Blazer EV; Ford Mustang Mach-E; Honda Prologue EV; Cadillac Optiq; RAM Promaster EV and 1500 EV, and the Jeep Wagoneer S. BMW has an EV plant underway in Mexico as well, scheduled to start producing iX3 EVs next year.
- Mexico’s total EV production in 2025 was about 250,000 vehicles, including full-electric and hybrids. 200,000 were exported.
- Mexican car owners purchased about 96,600 EVs in 2025. This is about 6 percent of Mexico’s new vehicle sales to consumers, and 40 percent above the number they bought in 2024.
- By dollar value, Mexico imported in 2024 about 2.8 billion USD worth of EVs and hybrids. This could be anywhere between 40,000 and 140,000 vehicles.
- Despite China surpassing the US by value of total vehicle imports into Mexico that year, for EVs, the US actually outsold China, mainly thanks to imports of US hybrid vehicles into Mexico. US-made vehicles were responsible for 48 percent of electric vehicles imported into Mexico, and China 42 percent. That is by dollar value. Given the big price differences between US and Chinese EVs, however, China could still have supplied almost double the number of EVs as the US. Germany, Canada and Japan also sold some EVs to Mexico.
- Imports of electric vehicles in 2024 were double (108-128 percent more) than 2023 imports by value, led by plug-in hybrids and pure plug-ins. Conventional hybrids were also up 22 percent that year.
- Mexico’s only Chinese plant, JAC, has reached a production output of 60,000 cars a year, pretty much all destined for final sale in Mexico, in 2025.