How Mexico’s Yucatán state is giving security to EV players despite political ups and downs

Yucatán state in southeastern Mexico, which has first-hand experience of the transition to electromobility, found a way to make concessionaires feel secure despite political changes by, among other elements, creating an autonomous authority to oversee transport concessions. 

The state started operations of the electric BRT system IE-TRAM last December in the metropolitan area of capital Mérida. The units, the state says, were bought and are run by concessionaires who early on had their concessions extended from 10 to 15 years. This is a move also adopted by Mexico City in 2020 when it started its own EV replacement program. 

“All electric concessions were extended to 15 years to give the concessionaire the certainty that it can ‘cushion’ the investment required to buy the buses, that are more expensive [than internal combustion engine ones],” said Aldo Salomón, chief financial controller of the Yucatán metropolitan mobility system during his participation in the Mexico EV day forum, hosted by local EV association AMIVE. 

In addition, the state came up with another idea to improve the concessionaire’s certainty by creating a new governing body that could endure political changes. 

“When we first started it was Yucatán’s institute for mobility [that oversaw the concessions], but we made the decision to create an autonomous transport agency to avoid this political topic because, if it depends on the local executive power it depends on the current governor,” Salomón said. 

By having an autonomous body in charge of regulating transport, the local official added, Yucatán state could guarantee the companies that their concessions would be secure for the length of their contract, no matter who led the local government. 

“Yucatán’s constitution now states that the budget of the agency cannot be reduced, and the governor also yielded the faculty to change tariffs to that body,” he said later in an interview with BNamericas. “So if there is a scenario where the agency runs out of funding, we have the autonomy to raise tariffs.”

IE-TRAM is currently the only EV transportation system in southeastern Mexico, connecting three municipalities in the state.