Electric car charging stations: key to the electromobility success in Mexico

While sales of electric cars and plug-in hybrids continue to be outpaced by gasoline-powered cars, an exponential growth in demand for electric vehicle battery charging stations is anticipated in the short term.

Currently, carmakers in Mexico are increasing their production of electric and hybrid vehicles, including the installation of the Tesla's "Gigafactory 6"; in addition, the import of electric cars manufactured in China is surprisingly growing. However, a study commissioned by the Mexican Association of the Automotive Industry (AMIA) revealed that the lack of a clear regulatory framework is one of the main inhibitors to the development of an electric vehicle charging network in Mexico. In this regard, experts estimate that at least 38,000 electric charging stations will be needed in Mexico within the next twenty years.

In the next sections, we summarize the status of the Mexican regulation for the installation of electric car charging stations and outline some practical considerations for companies involved in this business.

What is the status of electric car charging stations in Mexico?

Electric car charging stations can be installed in public spaces as well as on private property. The Mexican Institute of Transport estimates that in Mexico there are already 1,012 electric car charging stations throughout the country. These have been installed by private parties and by the federal government through the Federal Electricity Commission (CFE). The CFE estimates that there are three most common types of electric car charging stations in Mexico; the main differences are charging time, recommended use and recommended supply voltage.

What is the legal framework for installing and operating electric car charging stations in Mexico?

Since 2018, the Energy Regulatory Commission (CRE) issued a Ruling interpreting article 46, section I of the Electricity Industry Law (LIE) regarding the sale of electricity from an end-user to a third party.  As such, the basic regulation for electric car charging stations in Mexico is established in article 46, section I of the LIE.  Based on this article, the CRE has interpreted that the sale of electricity from an end-user to a third party for the purpose of recharging an electric vehicle is not considered power commercialization and, therefore, does not require permit or registration, as long as the electricity is supplied by the third party within the facilities of an end-user.  Pursuant to the LIE, an end-user may purchase electricity from a supplier without necessarily entering into a contract with the National Energy Control Centre (CENACE) as a participant in the wholesale electricity market.

To this date, the CRE has not published any new interpretative rulings or general administrative provisions regarding the installation electric car charging stations.

On the other hand, it is important to note that to date there is no specific public policy in relation to electromobility and the consequent installation of electric vehicle charging stations, nor have Official Mexican Standards been published to technically regulate their installation and operation. However, at the end of 2023, an initiative to reform Article 34 of the General Law on Climate Change was submitted in the Chamber of Deputies which, if approved, would oblige the federal government and the states and municipal governments to create public policies for the installation of electric car charging stations. This initiative is currently under review by the Climate Change and Sustainability Committee.

What aspects should be considered by companies planning to install electric service stations in Mexico?

From a legal perspective, there are several aspects to be considered for the installation electric car charging stations in Mexican territory, including the following:

1. Selection, leasing and/or acquisition of facilities

Having a suitable location for the installation of an electric car charging station is essential. Currently, private charging points have been installed in urban centers within supermarkets, shopping malls, public parking lots and car dealerships. Optimal site selection is essential for the success of charging stations. High vehicle traffic areas and popular destinations should be considered to maximize utilization.

2. Regulatory compliance

Companies aiming to deploy charging stations for plug-in vehicles must navigate the administrative permitting process specific to each locality. To avoid delays, it is crucial to ensure that all applications and documentation comply with the guidelines issued by the CRE and local administrative authorities.

Furthermore, CFE recommends that chargers comply with IEC/CISPR25 and the IEC-107 quick guide. In addition, it recommends that the total harmonic current distortion be less than 5% in order not to affect the National Electric System.

3. Connection to the power grid and power supply

Ensuring a constant and quality supply of electric energy has been one of the most relevant issues for companies seeking to install electric car charging stations in Mexico. In this regard, the different alternatives of electrical supply and the management of the interconnection to the national electrical grid must be carefully considered, depending on the characteristics of each electric car charging station.

4. Corporate and tax issues

As in any new or expanding investment in Mexico, electric car charging station companies must plan the best corporate and tax structure to install and operate them, starting by selecting the ideal type of corporate structure for their tax and investment planning, their corporate governance and the agents that will execute the business.

How can we help our clients?

At Garrigues Mexico we have extensive experience advising international companies with investments and operations related to the energy sector in Mexico. The quality of our services and responsiveness have earned us the trust and loyalty of our domestic and international clients.

For more information, please contact our energy and infrastructure experts in the Mexico City office.