18 Jan 22

Electric vehicles sales in Latin America, 2021 and beyond

While electric vehicle (EV) sales in 2021 worldwide jumped 98% year-over-year, Latin America is lagging slightly behind, averaging in the range of 75%. 

Although this has been partially due to a lack in government guidelines in the past, things are starting to turn around in Latin America as state officials are working toward initiatives that focus more on electrification.

In 2021, all the main automobile markets in the region reported upticks in EV sales and this is a trend that is likely to continue even at a stronger pace in 2022. Below is a snapshot of the largest automobile markets in the region. 

Brazil (+77%) 

Despite boasting 85% renewable energy, Brazil still lacks strong government incentive on EVs and some of this is due to the popularity of ethanol. 

EV sales reached nearly 35,000 in 2021, up 77% year-over-year, according to local electric vehicle association ABVE, and this represents some 2% of overall light vehicle sales. Much of this is due to the popularity of hybrid-ethanol EVs which represent two-thirds of the market. 

Plug-in hybrids (PHEV) sales are also on the rise, doubling last year but still much less compared to the hybrid-ethanol alternative. Besides getting a 50% break on the annual vehicle circulation tax IPVA, electrified vehicles are exempt from driving restrictions such as the Rodizio traffic control measure in the city of São Paulo. 

By 2030, some executives in the global auto industry believe that approximately 41% of new vehicles sold in Brazil will be electrified, according to a report released by consultancy firm KPMG.

Currently, approximately 73,000 electrified cars and light commercial vehicles are on Brazilian streets. As it is home to the largest vehicle market in Latin America, it is key for Brazil to take the lead in terms of powertrain selection throughout the region.

Renault Zoe EV fleet of Itaipu Binacional in Brazil, one of the first EV fleets in the country (source: Itaipu Binacional) 

Mexico (+61%) 

Considering the sales figures coming out at the end of the year, some 47,000 EVs and HEVs were sold in Mexico, up approximately 61% year-over-year and representing about 4% of total light vehicle sales, according to national institute of statistics and geography Inegi. 

Besides Mexico City, most of the electrified vehicles are being sold in the states of México and Nuevo León. Mexico is one of the countries in Latin America with the greatest demand and lowest price for electric vehicles.

Although 175,00 pesos is the maximum tax write off you can make when buying a company car over a four-year period, it is 250,000 pesos for electrified vehicles. The maximum set when leasing a vehicle for the same period would be 288,000 pesos (410,400 pesos for EVs)

By 2025, Mexico is seen to be commercializing 61,400 electrified vehicles per year, being 57,200 HEV and PHEV and 4,200 EVs, according to consultancy firm Frost & Sullivan. 

Argentina (topping +54%)

Full-year EV sales data for Argentina in 2021 was not available at the time this article was written. However, according to the country’s online information system for the automotive market SIOMMA, EV sales rose 54% to 2,383 units in 2020 and the 2021 increase is likely higher. 

As of 2018, automobile manufacturers and vehicle importers in Argentina need to declare carbon dioxide emissions and fuel consumption amounts, a key legislative decision pushing the transition to EVs.

Colombia (+60%)

The sales of EVs and hybrids (HEV) increased significantly in Colombia in 2021, jumping nearly 200% to some 18,000 units, according to local sustainable mobility association Andemos. 

In 2021, EV sales rose 60% to 1,200 units, according to local entrepreneur’s association Andi and federal merchants association Fenalco. The country seeks to have about 6,600 EVs on its roads in 2022.

For EVs, value-added tax is 5% as opposed to 35%, and local governments now give  tax breaks associated with the country’s technical-mechanical review, pollutant emissions control, and mandatory accident insurance premiums. It also stipulates that tax cannot surpass 1% of the cars value.

Chile (+231%)

Sales of zero and low-emission light and medium-sized vehicles in Chile jumped by 231% in 2021 year-over-year, according to Chile's national automotive chamber, reaching a record level of 85 units in December alone.

With a plan to end ICE (internal combustion engine) vehicle sales by 2035, Chile is working toward tax breaks on the annual vehicle usage tax on EVs. The tax would be eliminated for the first two years, followed by a 75% discount (years 3-4), 50% discount (years 5-6), and 25% (years 7-8). 

This tax is usually 65% lower for ICE vehicles due to the high price point of EVs.  

Peru (+160%)

The sale of electrified vehicles (BEV, HEV, and PHEV) reached 1,455 units in 2021, up 160% year-over-year. This still only represents 1% of the 157,100 vehicles sold in the country, according to local automotive association AAP. 

Although Peru still imposes an 18% tax on new vehicles, it is considering a reduction of import tax on EVs. This decision should be made by March. 

If passed, Peru would be following in the footsteps of neighboring Bolivia. The country eliminated taxes on BEVs and HEVs in July 2021, and this includes taxes on the components required to assemble them.

Ecuador (+225%)

A total of 345 EVs were sold in Ecuador in 2021, up 225% year-over-year, according to local association of automotive companies Aeade. As for hybrids, more than 10 times that amount was sold, reaching 4,225 units last year. 

EV and HEV sales (some 120,000) represented 3.8% of the market in 2021 and considering upcoming tax breaks, the trend is likely to continue. 

While the country’s value-added tax (12%) is exempt for EVs, its special consumption tax (3-32% depending on vehicle price) is exempt for both EVs and HEVs. Ecuador also imposes an import tax of some 35%.


In one of the latest Global Fleet Surveys 2021, we see that EVs are top of mind for Global Fleet Managers. For more information, visit here. 

Photo: EV recharging (copyright: Shutterstock)


Authored by: Daniel Bland