Global & Mexico Automotive Powertrain Market to 2031

Mexico’s automotive powertrain market is experiencing strong growth from 2023 to 2031, fueled by high vehicle production volumes and rising export demand. In 2024, the country played a key role in North America’s USD 16.17 billion drivetrain market. Mexico manufactured 3.8 million vehicles in 2023, with internal combustion engine (ICE) powertrains dominating at 88% market share. While electric vehicle (EV) adoption remains relatively low—only 5% of new vehicle sales in 2024—momentum is expected to build as Mexico adopts tighter emissions regulations by 2025 under the USMCA framework. Growth in the commercial vehicle sector, particularly in heavy-duty trucks, is being driven by fleet replacements and currency strength, with Class 5 trucks gaining popularity for last-mile urban deliveries. Passenger vehicles make up 70% of the market, propelled by continued demand for SUVs. However, the industry faces hurdles such as high EV battery costs and ongoing semiconductor supply issues. Leading manufacturers like Toyota, Daimler Truck, and PACCAR are taking advantage of Mexico’s well-established manufacturing base to support flexible production of both ICE and hybrid powertrains. With trade benefits under the USMCA and an increasing focus on cleaner technologies, Mexico is well-positioned for substantial growth in electric powertrain adoption through 2031.