EV Sales Skyrocket in Latin America, But Tesla isn’t Doing Well

Electric vehicle sales across Latin America are surging as Chinese automakers flood markets with affordable models and outcompete EV pioneer Tesla. Peru saw sales jump 44 percent year-over-year through September, reaching over 7,200 units; Chile hit 10.6 percent market share in September and Uruguay reached 28 percent in the third quarter. Brazil saw 9.4 percent penetration in August. 

Chinese brands have now captured nearly 30 percent of Chile’s passenger car sales and 22 percent in Uruguay. Tesla lacks an official presence in South America despite expressing early interest in expanding into the region. 

In 2019, Peruvian entrepreneur Luis Zwiebach wanted to buy a Tesla Model 3 and flew to California to test drive the EV but couldn’t navigate import procedures. He eventually bought a used unit from another Peruvian but initially had difficulties charging the Model 3. Tesla still operates no regional showrooms, and its electric cars are still pretty expensive compared to Chinese models. 

Conversely, Chinese manufacturers including BYD, Geely, and GWM sell vehicles at roughly 60 percent of Tesla’s prices. China’s Chancay port in Peru has accelerated the expansion of Chinese automakers into the country. 

This megaport opened last year north of Lima and has cut trans-Pacific shipping times in half. According to Costco Shipping Deputy Manager Gonzalo Rios, each ship delivers 800 to 1,200 vehicles. Costco Shipping operates the megaport and expects annual vehicle exports from China to hit 19,000 by the end of 2025. The facility currently ships vehicles to Chile, Ecuador, and Colombia, and Peruvian customs data shows that arrivals jumped from 839 cars monthly in January to over 3,000 in July. 

With Chinese automakers facing rising barriers of entry into Europe and the U.S., two of the largest EV markets in the world, the largely untapped South American market offers an enticing opportunity for expansion. They are also responding to domestic price wars and overcapacity in their local market by shipping surplus production overseas. JATO Dynamics global automotive analyst Felipe Munoz says most of this overcapacity is now flowing into Latin America, Central Asia, and the Middle East. 

Partnering with local importers and offering affordable models tailored to regional preferences has allowed them to capture market share in a market that Tesla has failed to penetrate. BYD leads electric sales in Brazil, Colombia, Ecuador, and Uruguay, ranking as third-biggest seller across all vehicle types in Uruguay, trailing only Chevrolet and Hyundai. The company has plans for a fourth Lima dealership by the end of the year and launched in Argentina last month despite higher trade barriers and economic headwinds. Meanwhile, Chery and Geely now operate over a dozen dealerships combined in Peru.  

The aggressive expansion of Chinese firms into the South American market gives North American auto companies like Massimo Group (NASDAQ: MAMO) a playbook that they can replicate within their preferred markets. 

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