China Powers Latin America's Shift to Electric Vehicles

The mega-ship BYD Shenzhen arrived on May 28 at the port of Itajaí in southern Brazil, carrying 7,292 electric vehicles from the Chinese company BYD. It set a record for this type of transport, with unloading taking four days.

Residents near the port of Itajaí in southern Brazil celebrated the arrival of 7,292 electric and hybrid vehicles from China aboard the ship BYD Shenzhen on May 28 as a “historic event,” with unloading taking four days.

It marked a record in maritime vehicle transport, though similar operations had already taken place in Brazil and other Latin American countries. A year earlier, the port of Suape in northeastern Brazil received 5,459 units, also from BYD—the world’s largest electric vehicle manufacturer.

"China has been pivotal... Beyond providing more affordable vehicles, its technological leadership and mass production capacity have shaped global trends." —Cristóbal Sarmiento

China’s automotive industry, led by BYD, is the key driver behind electric mobility in Latin America and the Caribbean.

Over the past four years, the number of light electric vehicles in the region has nearly doubled annually, with a 187% increase in 2024, reaching 444,071 by year-end, according to the Latin American Energy Organization (Olade), which excludes non-plug-in hybrids in its data.

This figure remains small—only 0.7% of the world’s EV fleet and 0.3% of the region’s total light vehicles, as noted in Olade’s May report—but it signals immense growth potential, now fueled by Chinese exports.

Lower prices and improving quality make Chinese models competitive amid rising demand for transport electrification, according to Fitzgerald Cantero, Director of Studies, Projects, and Information at Olade.

With their exports to the U.S. and EU effectively blocked by 100% and 45.3% tariffs, respectively, Chinese electric vehicle makers see Latin America and Asia as “attractive markets” still open, he explained.

Another appeal is Latin America’s abundance of renewable energy, Cantero told IPS from Quito, where Olade is based. Sustainable electricity is essential for decarbonising transport and reducing emissions.

Moreover, the region is rich in critical minerals such as lithium (for batteries), copper (for electrical components), and rare earth elements (used in EV motors and other technologies).

As a result, Latin America has become a strategic priority for China—the EV powerhouse that sold 12.87 million electric passenger vehicles domestically and exported 2.2 million more in 2024, nearly half of all global EV sales, according to Olade.

China’s dominance is clear. In 2024, the EU and U.S. produced only 2.4 million and 1.1 million EVs, respectively, according to the International Energy Agency. Olade estimates China accounted for over 75% of global EV sales—a share likely to grow amid stagnation in Europe and policy setbacks in the U.S.

“The U.S. EV industry has been discouraged by new legislation, which will dramatically impact consumer preferences,” said Margaret Myers, Director of the Asia and Latin America Program at the Inter-American Dialogue.

Meanwhile, China is ramping up exports to Global South markets with fewer trade barriers, she noted.

“EV production is part of a broader Chinese effort to improve its economy and dominate key industries—EVs, batteries, renewable energy, AI, bioscience, and others,” Myers added from Washington.

For now, Latin America remains a net importer. Brazil and Mexico are the largest markets, accounting for 73.6% of electrified vehicle sales (including full EVs, plug-in hybrids, and non-plug-in hybrids), according to the Latin American Association of Automotive Distributors (Aladda), based in Buenos Aires.

Yet Brazil (212 million people) and Mexico (130 million) comprise only 51.2% of the region’s 668 million population.

Argentina, with 47 million people, ranks fourth in population but not in EV adoption. Colombia, with 53 million people, ranks third in population and also third in EV sales, according to Aladda.

Colombia and Chile lead in electric buses, with 1,590 and 2,600 units respectively as of December 2024, according to Olade. Brazil has only 900, despite a much larger population. Chile, by comparison, has just 18.5 million people.

“Chile’s EV journey had its first wave from 2017 to 2020, focused on public transportation—especially electric buses,” said Cristóbal Sarmiento Laurel, Director of Energy and Sustainable Development at Diego Portales University.

This allowed controlled charging routes and schedules, with BYD leading the rollout.

The second wave, beginning in 2021, saw steady growth in light EV and hybrid sales, dominated by Chinese manufacturers like BYD, Maxus, JA, DFSK, and Changan.

“For Chile, the relationship with China isn’t just commercial—it’s strategic for the energy transition,” Sarmiento added.

Transport accounts for 33.3% of Chile’s energy consumption and relies heavily on fossil fuels. Electrification supports climate goals.

“Electrified cars help, but they promote individual mobility rather than transforming public transport,” noted Antonio del Río of Mexico’s National Autonomous University.

Electric buses, he said, are more effective: “They cost 60% less per kilometre than conventional vehicles.”

As of 2024, Mexico had only 780 electric buses—half of Colombia’s number and a quarter per capita.

Latin America saw 412,493 electrified vehicles sold in 2024, a 174.9% jump from 2022. Brazil led with 256.2% growth; Mexico followed at 142.2%.

Still, electrified vehicles make up a small share of total sales: 8.1% regionally, 6.8% in Brazil, 6.1% in Chile, and a standout 25.8% in Colombia.

Plug-in hybrids (PHEVs) grew fastest at 665.3%, followed by full EVs at 403%. HEVs (non-plug-in hybrids) declined in Brazil but grew in other countries.

A key trend is brand diversification: 23 Chinese EV brands are available in both Mexico and Chile, which has a total of 52 brands, according to Rodrigo Salcedo, president of Chile’s EV Trade Association (Avec).

More brands mean more competition, models, and better prices—but a lack of service infrastructure persists, especially outside bus fleets, Salcedo warned.

A third EV wave is now underway: local assembly plants, including Chinese ones.

In Brazil, BYD began local production in July at its Camaçari, Bahia plant—launching three models (one EV and two PHEVs). GWM (Great Wall Motors) is expected to start production soon in Iracemápolis, São Paulo.

Both companies took over former plants—BYD from Ford and GWM from Mercedes-Benz.

While Chinese cars have been made in Brazil since 2017 (e.g., Caoa-Chery), electrified models were low in volume. BYD’s plant, built to produce 150,000 units annually (with plans to double), also includes battery and parts manufacturing, said Mauro Pereira, head of Camaçari’s industrial park.

“BYD is placing Brazil at the forefront of vehicle tech,” said Pereira, predicting 20,000 direct jobs and three times more indirect ones. The plant could turn Brazil into an EV export hub.

The Camaçari facility benefited from land and tax incentives, but Brazil’s new import tariffs were a stronger motivator. Introduced in January 2024, they start at 10% and will rise to 35% by 2027.

Chinese EVs are cutting costs with smart, efficient technologies.

“They're smartphones on wheels,” said Thiago Sugahara, VP of the Brazilian EV Association and GWM executive. Owners can control their cars remotely via phone apps.

“An electric car is a battery with four wheels,” quipped Ana Lia Rojas, head of Chile’s Renewable Energy and Storage Association (Acera), highlighting both cost and potential to support power grids.

Colbert Marques, a sales consultant at BYD’s dealership Itavema, said Chinese brands have halved EV prices. Some models now start just over $20,000—forcing Western automakers to slash prices.

“EV buyers are more informed and tech-savvy—even older ones,” Marques noted, after switching to BYD in 2023 following 18 years with traditional vehicles.