The future of electromobility in the world and in Latin America

The future of electromobility in the world and in Latin America

José Carlos Díaz Silva[1] , OBELA[2]

The transport sector is responsible for 23% of global CO2 emissions. Electric vehicles (EVs) are an alternative for reducing these emissions in the atmosphere. Although the overall effect depends on the type of electricity generation in the energy matrix, EVs emit 37% less CO2 than conventional vehicles over their lifetime, according to industrial estimates. If the electricity comes from renewable energy sources, the reduction is between 73% and 89%. Their production took off in 2008 when Tesla launched the EV-1 model. Since 2015, sales have increased steadily. In 2024, global EV sales increased from 14 million to 18 million, representing a 28% rise compared to 2023. In this article, we will review the progress and prospects of electromobility in the private passenger segment worldwide and in Latin America (LA), where the trade war and global economic slowdown could slow down the electrification of transport.

            According to data from the International Energy Agency (IEA, which only includes plug-in and battery hybrids), just over 18 million units were sold in 2024, with China leading the way with 65% of sales, followed by Europe with 18% and the US with 8%. Sales in Latin America[3], accounted for just 1%, but grew by 223% over the same period. 

[4]The data in Figure 1 highlights the potential of China and Brazil as the most relevant markets. This analysis, however, does not include conventional hybrid electric vehicles (HEVs), especially Japanese brands. This segment, which is more applicable for underdeveloped countries, such as those in Latin America, where there is no public investment in recharging infrastructure, presents a viable intermediate option for the region. For example, if we take them into account (see Table 1), in 2024, sales in Brazil amounted to 177,000 units and in Mexico exceeded 124,000. In the case of Colombia, the figure rises to 51,000 units, with HEVs dominating the market (76%). For these countries, on average, HEVs accounted for 52% of EV sales, indicating a promising future for HEVs in Latin America.  

In the context of global competition, Japanese companies such as Toyota dominate HEV production. For its part, the leader BYD produces all types of electric vehicles, while Tesla, its closest competitor, only manufactures batteries. The diversification of EV types allows for greater penetration of electromobility and buys time to organise the changes required in the urban and interurban infrastructure of each region.

The decline in EV prices explains the market's progress, despite Brazil reinstating a 10% tariff on EV imports in 2024 and Mexico eliminating the import tax exemption in October of the same year. In 2025, the Mexican government stated that it would consider increasing tariffs on cars from China in general in 2026. The drop in prices is the result of two factors. First, battery costs have fallen due to lower lithium prices, increased volumes and more efficient manufacturing processes. Second, the growing demand for EVs, driven by changes in consumption patterns, enables economies of scale, particularly in the mid- and low-range segments. Thus, globally, Chinese-made EVs are the most competitive, even when compared to their conventional counterparts. 

            European countries and the US have reduced subsidies for EV purchases, and this has not slowed sales. In Asia (China and Southeast Asia), the programmes continue. On the other hand, some factors could slow their progress. More EVs also require more public and private charging infrastructure (charging stations and residential charging points). In North America, austerity measures will slow down public investment in car charging. President Trump's fiscal adjustment programme paused funding for the national EV infrastructure programme in January 2025. In Europe, in the face of economic stagnation, particularly in Germany, CO2 emission reduction targets for conventional cars have been relaxed, delaying the transition. 

            In short, the global EV market is on the rise. China dominates the sector, both in terms of supply and demand. However, it's important to note that some of the largest markets in Latin America, including Brazil, Mexico, Colombia, Costa Rica, and Chile, are also making significant contributions to the market. This growth, although it may require a higher proportion of HEVs, is a testament to Latin America's role in the global EV market. The trade war and its effects will not stop the transition, but will slow it down.