Mexican electric vehicle startup Olinia plans to unveil its first two prototypes in June as it seeks $200 million in private capital to start manufacturing and reshape urban transportation, according to recent reports.
The company, backed by the Mexican government, is aiming to launch sales of its low-cost, all-electric models in early 2027. Roberto Capuano, Olinia’s CEO, stated that engineering work on the prototypes of the mini electric vehicles should be completed by the end of this month. Following that, initial manufacturing and testing will commence, accelerating discussions with potential private investors as the company will then be able to share technical specifications.
Despite being in its early stages, Olinia has garnered significant attention from President Claudia Sheinbaum, who frequently promotes the startup in her daily press conferences and on TikTok. The company’s business plan leverages its government connections to gain an advantage in a growing market, drawing parallels to China’s state-backed EV success, though Mexico currently lacks the technological infrastructure and resources to replicate that model on the same scale.
Olinia Enters a Market Increasingly Dominated by Chinese Automakers
“This project is unprecedented in the country,” Capuano said, adding that “the reason it has so much eloquence is because the business opportunity is very attractive.” He previously led the Metrobús public transportation system in Mexico City while Sheinbaum was the capital’s chief executive.
Olinia’s venture into electric vehicles comes as traditional automakers navigate a rapidly evolving global market. The company is also entering a market increasingly saturated with Chinese vehicles, with BYD currently selling seven out of every ten electric cars in Mexico despite existing tariffs.
Capuano anticipates annual sales of 100,000 Olinia vehicles, emphasizing that the government’s role is to act as a catalyst while private investment will be crucial for the supply chain and working capital needed to establish the company’s plants, particularly in the first two years.
Initial Models Focus on Urban Mobility
The two initial prototypes are low-speed, plug-in vehicles. One is designed as a passenger vehicle with capacity for the driver and up to five additional passengers. The other is a cargo vehicle for two passengers capable of carrying 600 kilograms, roughly the weight of a large vending machine.
Capuano added that a third, faster personal vehicle prototype will be presented later, and the company will initially focus on the motorcycle and traditional taxi markets for short-distance deliveries or urban commutes.
“We are creating a category that we call a light urban vehicle of low and medium capacity,” he said. “This proves a niche that does not exist today, in which we can enjoy an advantage by being the first in the market.”
Olinia expects an open market and strong competition, potentially from Chinese or Indian electric vehicle companies. “Our intention has never been to create a monopoly on micromobility,” Capuano stated. He also noted that purchase orders from the federal government and state governments could support drive initial sales.
Olinia already has at least one private Mexican competitor, Zacua, which specializes in mini electric vehicles for urban transportation. However, its production volumes have been minimal, partly due to its focus on manual and artisanal production.
A Key Project for President Sheinbaum
Government spending on Olinia to date has been limited. Last year, the company received less than 50 million pesos in initial funding from the federal government and the state of Puebla, where its design workshop is located.
However, public spending is increasing. Recently approved research and development funds are expected to contribute another 100 million pesos. Here’s in addition to the 175 million pesos Olinia has reportedly received from the Secretariat of Energy and LitioMx, the Mexican state lithium company created six years ago, to build a battery pack manufacturing plant.
The company has also received support from local public research institutions that are funding the salaries of the engineers and scientists working on the project.
“The way to understand Olinia is like when a baby is born in a large family and everyone contributes to ensure the baby grows up healthy,” Capuano said.
Currently, Mexico has very little commercial battery production and does not yet extract lithium, despite possessing potentially large deposits of this key battery metal.
Details on Olinia’s Electric Vehicles and Tax Benefits
The first two Olinia vehicles will have a top speed of 50 kilometers per hour. Capuano indicated that the approximate price will be 150,000 pesos, or about $8,400 USD.
President Sheinbaum promoted Olinia in her first speech after taking office as President of Mexico at the end of 2024, describing the project as a shining example of Mexico’s high-tech capabilities and local creativity.
Since then, the government has adopted policies to promote the electric vehicle sector in general. In addition to existing tax incentives for purchasing electric vehicles, as part of the Plan Mexico, electric and plug-in hybrid cars purchased through 2030 can benefit from an immediate tax deduction equivalent to almost 90% of their value.
The Federal Electricity Commission (CFE) is also collaborating by offering electric vehicle buyers a specific meter for charging at a lower commercial rate.
With information from Bloomberg.
