Latin America begins 2026 with strong growth in the transition towards electric mobility

Latin America has been a relative laggard in the adoption of electric vehicles, reaching only a 5.4% market share (2.9% BEV) in 2025, compared to 9% in the US (7.5% BEV), 29% in Europe (19.5% BEV) and 54% in China (33% BEV). Historically, this lag can be partly explained by the absence of public policies that support large-scale manufacturing and sales of electric vehicles in the region, which in turn can be attributed to the high costs of these vehicles, limiting governments' willingness to allocate substantial public funds to their promotion.

Despite this, available data for the first two months of 2026 points to strong and sustained growth in the EV market, though it’s important to clarify that Mexico is not included in this calculation, since information for this country is provided quarterly, meaning we can only include it in our calculations once full quarterly information is available for the region in late April.

This follows the trend from previous years, with growth exceeding 100% in 2023 and 2024 and reaching 50% in 2025 (including Mexico). In the first two months of 2026, an acceleration in growth rates is evident, reaching 80% (excluding Mexico for the reason prior mentioned), with battery electric vehicles (BEVs) growing faster than plug-in hybrids (PHEVs), at 90% and 70% year-over-year respectively. As a result, market share for the first two months of 2026 stands at 7.7% (4.5% BEV), comfortably surpassing 5% (the point at which a market is entering the “disruption zone*”) and getting close to the 10% milestone.

Rapid growth in recent years has been closely associated with the arrival of competitively priced models, mostly from China, starting in 2024 in Costa Rica and in 2025 across most other countries in the region. Most countries do not offer direct purchase incentives. However, many do have favorable legislation for electric vehicles in the form of tariff exemptions, urban mobility benefits (primarily exemptions from vehicle restriction policies), energy efficiency laws, or fiscal and tax benefits.

In this context, Brazil has consolidated as a regional production hub, attracting significant investment and featuring assembly or production of electric and plug-in hybrid vehicles by multiple brands, including Chinese automakers (BYD, Great Wall Motor, Chery) and Western companies (General Motors, Stellantis, Volkswagen). Amid tightening tariff conditions in multiple countries, the presence of local production is important to maintaining affordable prices in these markets, as Brazil has free trade agreements that allow it to export vehicles with low or zero tariffs to most countries in the region.

If the growth trend observed in the first two months of the year continues, our research suggests that Latin America could close 2026 with more than 600,000 electric vehicles sold, reaching a market share above 10%. However, in the context of an oil crisis and the subsequent increase in fuel costs, there is a possibility that sales could be even higher. What the early data suggests is that 2026 is shaping up to be a year of strong growth for the region, which remains behind China and Europe (regions that will likely also experience strong growth), but according to current trends, could potentially surpass larger regional markets such as the United States in market share, becoming an increasingly relevant player in the global transition.

*The "Disruption zone" is a term that defines the moment at which the adoption of a new technology moves beyond the early adopters and into the mainstream, normally leading to an acceleration.