BMW Group announced on 3 February 2023 that it would invest 800 million euros in its San Luis Potosí plant to build Neue Klasse electric vehicles from 2027. Of that, 500 million euros goes to high voltage battery assembly. It is an export project.

The domestic side of the market looks nothing like that. INEGI reported on 9 January 2024 that Mexico built 3,779,234 light vehicles in 2023 and exported 3,300,876 of them. That is 87 percent of the year's output leaving the country. Domestic light vehicle sales were 1,361,433 units. Charging is thinner still: a México ¿Cómo Vamos? review published on 25 July 2023, citing the Instituto Mexicano del Transporte, counted 1,012 electrolineras nationwide, installed by both private operators and CFE, with 222 in Mexico City, 103 in Jalisco and 99 in Nuevo León.

For a company running plants, warehouses or fleets in Mexico, that gap is the decision. Vehicles will be available. Charging will not, unless the company builds it on its own site. What follows is what building it involves in Mexico: the CFE tariff the load lands on, what it does to the demand charge, and where onsite generation stops being an option.

What the plant announcement does and does not mean

BMW's figure is committed capital with a stated start date. It does not enlarge the Mexican market on its own. Mexican assembly plants build for the United States and Canada, and the 2023 INEGI figures show the ratio plainly at 3.30 million exported against 3.78 million produced. A plant in San Luis Potosí building Neue Klasse vehicles from 2027 does not lower the price of an electric vehicle in Querétaro. It changes the supplier base, the local demand for skilled electrical trades, and the load profile of an industrial corridor. Those effects arrive years before any change in showroom prices.

A company deciding whether to electrify its own vehicles is answering a different question. That case rests on the duty cycle and the cost of charging, which we set out in the advantages of electrifying commercial fleets.

The demand-side incentive is federal, narrow and old

Mexico has one standing federal purchase incentive. Article 8 of the Ley Federal del Impuesto sobre Automóviles Nuevos exempts battery electric vehicles, and electric vehicles that also carry a combustion or hydrogen motor, from the tax on new automobiles. The exemption was added by a reform published in the DOF on 30 November 2016 and took effect on 1 January 2017.

There is no federal cash subsidy for buying an electric vehicle and no federal grant for installing a charger. Anything beyond the ISAN exemption is state or municipal and has to be checked jurisdiction by jurisdiction. The Mexican business case for charging therefore has to close on operating cost alone. Our 2022 assessment of the Mexican EV market reached the same conclusion from a smaller base of vehicles.

Charging is a site electrical problem

The count of 1,012 electrolineras in July 2023 is small against 1.36 million light vehicles sold in 2023. The reason is not a shortage of interest from operators. Each charger needs electrical capacity at a specific address.

CFE has run its own program since the middle of the last decade. In May 2018 its then director general, Jaime Hernández, told Forbes México that CFE was working with the Secretaría de Energía on a 60 million peso package to install and reinforce electrolineras. He also said 100 more stations would be added that year, on top of roughly 1,500 already in the country. Forbes México reported Level 2 units, which charge a car in two to four hours, and Level 3 units, which do it in 20 to 30 minutes. Five years after that package was announced, the July 2023 count stood at 1,012 stations, against roughly 1,500 that Hernández said already existed in 2018. A build-out at the pace a 1.36 million unit market needs is not going to come from the utility.

Rules are the second constraint. The México ¿Cómo Vamos? review of 25 July 2023 argued that Mexico had no dedicated regulation for operating public charging stations. Installers were working from IEC and NMX standards, among them NMX-I316-NYCE-2020, plus CFE guidance on keeping total current harmonic distortion below 5 percent. For a private site the governing documents are the CFE supply contract, the wiring standard, and whatever the local distribution division will approve. There is no permit to wait for. There is a capacity question to answer.

What a charger does to a CFE bill

This is where the finance case is won or lost. CRE set the methodology for the final basic supply tariffs in Acuerdo A/058/2017 of 23 November 2017, and determined the schedules that took effect on 1 December 2017 in Acuerdo A/061/2017 of 29 November 2017. A site drawing more than 25 kW in medium voltage sits on GDMTO or, with hourly metering, on GDMTH. Under GDMTH the capacity charge is driven by maximum demand coincident with the punta period, and energy is priced separately in the base, intermedio and punta windows.

Now add hardware. A single 150 kW direct current charger is a 150 kW block of new demand. If it draws during punta on one afternoon of the billing month, it sets a capacity charge paid for the whole month, whatever the utilization of the charger. Ten Level 2 units at 7.4 kW each behave differently: 74 kW if they all run together, far less if a controller staggers them. The engineering choice and the scheduling choice are the tariff choice.

Two numbers decide the project before any equipment is quoted. The first is the site's contracted demand. The second is the highest demand the meter has recorded across the last twelve billing periods. The difference is the headroom a charger can occupy without changing the service. Exceed it and the site is into a contract change with CFE Distribución and, depending on the transformer, a service upgrade with a lead time measured in months. We covered how the charge itself is built in a guide to beating GDMTH demand charges.

Onsite solar and the 0.5 MW ceiling

Pairing chargers with a rooftop array is the standard proposal. It needs two qualifications in Mexico.

The first is legal. Article 17 of the Ley de la Industria Eléctrica, published in the DOF on 11 August 2014, exempts generation below 0.5 MW from needing a CRE generation permit. It exempts nothing else. The site still signs an interconnection contract with CFE Distribución under the distributed generation rules CRE issued as RES/142/2017, published in the DOF on 7 March 2017, and still needs municipal construction and land use approvals. Under medición neta, the scheme almost every Mexican distributed generation customer uses, surplus is credited against later consumption rather than paid in cash.

The second is physical. Fleet charging is an overnight load, and an array produces nothing overnight. The array displaces daytime site consumption while a battery, or the grid, carries the vehicles. Anyone quoting solar as the source of overnight charging energy is quoting a battery and calling it solar.

Carbon accounting follows the same discipline. SEMARNAT publishes an annual emission factor for the Sistema Eléctrico Nacional, and grid electricity used to charge a vehicle carries whatever factor is current. The reduction against diesel is real and calculable, and it is not zero.

What could make this reading wrong

Three things. If retail chains and fuel station operators build public charging faster than expected, employer-owned charging becomes a convenience rather than a requirement. If a state government introduces its own incentive for charging infrastructure, the local economics change in a way the federal picture does not show. And an announced plant is not a built plant.

The site's own electrical headroom does not depend on any of that. It is measurable today, it constrains every charging scenario, and the lead time to change it is the longest item in the project.

What to do now

Pull the last twelve CFE bills for each site that might charge vehicles. Record the contracted demand, the maximum demand billed each month, and the period in which it fell. That establishes the headroom.

Then size the requirement in kilowatt hours per night rather than in chargers. A van needing 60 kWh overnight across ten hours is a 6 kW average load, which is a scheduling problem. The same van charged in 40 minutes is a 90 kW spike, which is a capacity problem and a tariff problem at once.

Where the two numbers do not reconcile, the options are load management, a battery to shave the peak, a service upgrade, or fewer simultaneous chargers. Price all four before ordering hardware. The service upgrade carries a CFE Distribución lead time, so it goes first in the schedule even when it is not the first choice.

Have the charging load assessed against your CFE account

Send the twelve most recent CFE bills for the site, its contracted demand and connection voltage, and the number and type of vehicles you expect to charge. Mexico Energy Partners will return the charging load profile, the tariff the site would fall under, the effect on the demand charge, and whether the existing service carries the load or needs a CFE Distribución upgrade. No commitment to a project is required.

Request a charging site assessment

Sources

• BMW Group, "BMW Group to build NEUE KLASSE in Mexico from 2027", 3 February 2023. bmwgroup.com
• INEGI, Registro Administrativo de la Industria Automotriz de Vehículos Ligeros, press release 11/24, 9 January 2024. inegi.org.mx
• México ¿Cómo Vamos?, "El futuro de las electrolineras en México y la normativa eléctrica que las acompañará", 25 July 2023. mexicocomovamos.mx
• Forbes México, "CFE invertirá 60 millones de pesos en electrolineras durante 2018", 7 May 2018. forbes.com.mx
• Ley Federal del Impuesto sobre Automóviles Nuevos, Article 8. Exemption for electric and hybrid vehicles added by reform published in the DOF on 30 November 2016, in force 1 January 2017. diputados.gob.mx
• Comisión Reguladora de Energía, memoria documental "Tarifas Finales del Suministro Básico", 31 October 2018, on Acuerdo A/058/2017 of 23 November 2017 and Acuerdo A/061/2017 of 29 November 2017. gob.mx
• Ley de la Industria Eléctrica, Article 17, DOF 11 August 2014, and CRE resolution RES/142/2017 on distributed generation, DOF 7 March 2017.