Mexico's Advanced Battery Market Set to Grow to USD 1.9 Billion by 2031

Dublin, Sept. 18, 2026 /CourierPR/ -- Mexico's advanced battery market is set to experience significant growth, reaching USD 1.9 billion by 2031, according to a new report from ResearchAndMarkets.com. The market is expected to grow at a compound annual growth rate of 11.6%, starting from USD 1.1 billion in 2026. This growth is primarily driven by the expansion of electric vehicle manufacturing and the increasing demand for utility-scale energy storage systems.

The report highlights that Mexico's electric vehicle (EV) manufacturing has seen a substantial increase, with production rising from 6,717 units in 2020 to over 200,000 units in 2024. This surge in EV production has created a sustained demand for high-capacity lithium-ion battery systems. A notable investment by BMW Group, which plans to invest USD 540 million in a battery manufacturing facility in San Luis Potosi, underscores the growing confidence in Mexico's ability to support next-generation electric vehicle production.

In addition to EV manufacturing, the report notes that utility-scale energy storage is expected to become one of the fastest-growing applications. The National Energy Commission's requirement for battery energy storage systems, particularly the 30% solar storage requirement for large solar projects, is expected to drive the market. This regulation provides a durable growth channel that is less dependent on consumer electric vehicle adoption.

Nearshoring is also accelerating foreign direct investment in Mexico's battery industry. Manufacturers are expanding battery pack assembly and component production in Mexico to reduce exposure to Asian supply chain disruptions and qualify for North American trade benefits. Much of this capacity is expected to serve electric vehicles exported to the United States.

However, the report also points out that Mexico continues to rely heavily on imported lithium, cobalt, nickel, battery cells, and modules. Limited domestic refining and processing capacity exposes manufacturers to commodity price volatility, geopolitical risks, and international logistics disruptions. The development of Mexico's lithium resources through LitioMX could support a domestic battery value chain, although regulatory uncertainty may affect private investment and long-term procurement planning.

The local supply chain remains concentrated in battery assembly, integration, and electronic systems. Establishing domestic battery cell manufacturing will be essential to increase economic value capture, improve cost competitiveness, and strengthen supply security. Lithium-ion batteries account for the dominant market share, with lithium iron phosphate technology gaining momentum in stationary energy storage, and high-nickel chemistries remaining important for premium electric vehicle applications.

Batteries above 200 Ah are projected to record the strongest capacity-based growth, supported by utility-scale storage installations and large automotive battery packs. Automotive applications hold the leading market share across electric vehicles, hybrid electric vehicles, and plug-in hybrid electric vehicles. Energy storage systems represent the second-largest and fastest-growing application area, while industrial motive power, consumer electronics, medical equipment, aerospace, and defense provide additional demand.

The competitive landscape includes global battery manufacturers, automotive suppliers, energy storage specialists, and local assembly companies. Prominent participants include LG Energy Solution, Samsung SDI, Panasonic, BYD, Tesla, BMW Group, Jabil, and Prime Power Omega. BMW Group's in-house battery investment reflects a broader shift toward vertically integrated production, while Jabil supplies battery management systems and electronic components from its Mexican manufacturing base. Prime Power Omega serves industrial logistics and material-handling applications with locally produced lithium battery solutions.

A potential international investment in an electric battery factory in Ciudad Obregon, Sonora, announced in February 2025 in connection with the Olinia affordable electric vehicle initiative, could mark a significant step toward domestic battery cell manufacturing. If completed, the project would strengthen Mexico's position within the North American advanced battery ecosystem.

The report provides a comprehensive analysis of the market segments, policies, regional conditions, and industry applications. It assesses market drivers, restraints, emerging technologies, and future trends. Competitive intelligence covering leading companies, strategies, and market positioning is also included. The research offers actionable insights for market entry, geographic expansion, and capital investment decisions, benefiting startups, research institutions, consultants, small and medium-sized enterprises, and large enterprises.