Recent data points to a notable surge in electric vehicle purchases across South America, marking a major reversal of the region’s EV adoption trajectory after it spent most of the 2010s lagging behind the U.S., China, and Europe.
Although South America is undoubtedly late to the electric vehicle transition and remains a minor player in the global EV market, it has been adopting electric cars at a blistering pace over the past couple of years. As 2024 drew to a close, several South American markets had passed the 5% electric vehicle sales threshold that signals rapid EV adoption has begun.
Brazil, the largest economy in South America, registered around 125,000 new electric vehicles last year, representing 6.5% of all new vehicle sales in the country, while Colombia and Uruguay accounted for over 7% and 13% of new electric vehicle sales respectively. The region may have been slow to begin transitioning from fossil fuel-powered cars to electric vehicles, but it has reached an inflection point that indicates accelerated EV adoption ahead.
Most of the new electric cars arriving in South American ports come from Chinese carmakers, breaking the region’s longstanding pattern of importing vehicles primarily from North American and European manufacturers.
With European and American regulators imposing steep tariffs on Chinese-manufactured electric cars, Chinese automakers like BYD turned to South America as an alternative market for their affordable EVs. Some of them have established operations in Brazil and Mexico as they work to secure footholds in the nascent South American electric vehicle market before Western carmakers enter aggressively.
Brazil dominates the region’s vehicle market through sheer scale, and its domestic automotive industry has historically relied on alternative fuels like ethanol. Other South American countries depend heavily on public transportation, particularly in urban areas where minibuses and buses play larger roles compared to private cars.
Additionally, since South America imports substantial numbers of used internal combustion engine vehicles from Asia and Europe, it tends to have lower new vehicle sales rates compared to North America or Europe, which has historically slowed adoption of cleaner technologies.
These unique market characteristics mean South America’s EV transition follows a different path than other regions, with public transportation electrification leading the charge alongside passenger vehicle adoption.
The transformation is already gaining significant momentum, with policy leaders like Chile mandating zero-emission vehicles by 2035 and cities like Bogotá operating some of the world’s largest electric bus fleets outside China. Santiago is targeting fully electric public transport by 2040, while Brazil has attracted billions in investment from Chinese manufacturers establishing local production facilities.
The region benefits from abundant renewable energy resources with Uruguay, Paraguay, and Brazil already powered largely by clean electricity, making EV adoption immediately beneficial for carbon reduction.
However, economic volatility, income inequality, and continued used car imports from other regions pose ongoing challenges. Despite these barriers, projections suggest South America will achieve cost parity with conventional vehicles by the late 2020s, potentially accelerating adoption across all market segments.
For North American renewable energy firms like PowerBank Corporation (NASDAQ: SUUN) (Cboe CA: SUNN) (FSE: 103) constantly looking to conquer additional markets, Latin America could present exciting possibilities to explore.
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