BYD Leads EV Boom In Central & South America – CleanTechnica

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Felipe Munoz at JATO Dynamics told Reuters recently that Chinese automakers face a price war in China that makes it difficult for them to make a profit in their home market. The answer for many companies is to export those excess new vehicles to other countries. Lately, Central and South America have become a hot new market for Chinese-made EV products

The Chinese have “carved out space,” for both electric and conventional cars, said Martin Bresciani, president of Chile’s automotive business chamber, CAVEM. “The Chinese have already demonstrated that they match global standards in quality.” Chinese brands reached 29.6% of all new passenger car sales in Chile in the first quarter of this year.

The share of EV sales in South and Central America has doubled this year compared to 2024. The total across the entire region is just 4%, but in some markets, that percentage is much higher. In September, EV sales in Chile were 10.6%, 9.4% in Brazil, and 28% in Uruguay. BYD is the market leader in Argentina, Brazil, Colombia, Ecuador, and Uruguay.

Part of China’s success has been partnering with trusted local importers to offer more affordable models tailored ​to regional tastes, according to seven dealerships Reuters spoke to in Peru, Chile, Uruguay, and Argentina. In Uruguay, BYD is the third largest brand behind only Chevrolet and Hyundai and now has a 22% market share in that country.

Boosting Market Share

Chinese brands such as BYD are pulling every lever to gain market share. In Uruguay, Gonzalo Elgorriaga, who owns a luxury car dealership, told Reuters, “The Chinese struck first and struck hard.” They collaborate with local banks to offer credit lines, but they also are highly competitive on price. The least expensive EV from BYD costs just $19,000. “I can buy three Chinese pick-ups, for the price of two traditional brands. That’s a big difference,” said Federico Guarino, another Uruguayan car dealer,

There is more to it than just price. As part of its Belt and Road strategy, China constructed a new state of the art port facility in Chancay, Peru. While the port is available to all ships, it makes things especially convenient for those bringing in cars from China.

“Each ship brings 800 to 1,200 vehicles,” Gonzalo Rios, deputy manager at Cosco Shipping, the port operator, told Reuters. Cosco expects the total number of vehicle arrivals from China to reach 19,000 by the end of the year.

From Chancay, the cars are distributed to Chile, Ecuador, and Colombia. Chery is also using the port to bring its cars to South and Central America. Peruvian ​customs data shows that in July, 3,057 cars arrived at the port, up from 839 in January. Peru does not have a large scale car manufacturing industry to protect from the sale of Chinese cars.

EVs In Brazil

The situation is different in Brazil, the largest country in South America. There the arrival of Chinese companies has lead to tensions. Unlike Peru, Brazil has a tariff structure that encourages companies to manufacture vehicles locally. BYD began assembling EVs at a former Ford factory in Bahia in October and Great Wall Motors launched partial production in August at a repurposed Mercedes-Benz facility.

Ricardo Bastos, of GWM Brazil and president of the country’s EV association, said the company expects to begin exporting vehicles from its Brazil factory to the region by 2027, thanks to favorable trade agreements with Mexico, Chile, and the South American trade bloc Mercosur. “Brazil was the third country to receive a Great Wall factory ‍after Russia and Thailand. It’s a strategic decision, showing the strength Latin America has,” ⁠Bastos said.

Brazilian industry and labor groups say China is taking advantage of temporarily low tariff barriers for EVs to ramp up its exports rather than investing to build Brazilian factories and create jobs. BYD has also faced scrutiny over reports of poor conditions for some workers at its new Bahia plant. The government has since moved to re-impose import duties of up to 35% by the middle of next year.

Brazil could soon challenge Chancay in Peru as a regional distribution center. The port of Vitoria on Brazil’s southeastern Atlantic coast currently leads in national vehicle imports and the port of Itajai further north recently received a shipment of 22,000 vehicles. BYD’s country manager for Argentina, Stephen Deng told Reuters in October that the company was expecting arrivals from Brazil in 2027. “I think we could eventually see Argentina adopting the same EV rates that we see in Brazil.”

EV charging infrastructure along many South American travel routes is still in its infancy, a fact that has led many drivers to use a low cost electric car for their daily driving needs, while keeping a conventional car in reserve for longer trips. The lowest priced EVs can only go a relatively short distance before needing to be recharged.

EVs In Uruguay

Uruguay, which is located just south of Brazil, is one of the smallest countries in South America but is a leader in the EV revolution. It is also a leader in clean energy technologies. EVs accounted for about a quarter of all new vehicle sales in Uruguay through October — more than double last year’s share. Sales of electric cars are helped by a zero import duty, excise tax exemptions, and gasoline that costs more than $7.00 a gallon. That combination of factors — which sounds a lot like how Norway began its transition to EVs — is attracting lots of customers for electric cars.

About 90% of the 11,000 EVs sold this year in Uruguray came from Chinese brands such as BYD, JAC, and Omoda. The BYD Seagull costs just under $20,000 and can save drivers significant money in fuel costs if they charge at home. However, most of those inexpensive cars from Chinese companies have a fairly short range, which makes them unsuitable for longer journeys in a region where fast charging along major transportation routes is still lacking.

Maria Clara Sole lives near Montevideo, the capitol city of Uruguay. She told the Detroit News she typically drives about 60 kilometers (37 miles) a day commuting to work and shuttling her children around in the BYD Yuan Pro she and her husband purchased last year. She estimates she saves up to $400 per month by charging her SUV at home versus filling the tank of a conventional car at a gas station.

She and her husband also own an SUV with a gasoline engine, which they use for longer road trips. “We aren’t ready to go fully electric with both cars. There’s still some uncertainty — especially if I want to drive to Argentina or Brazil. That possibility is limited if it’s not a gasoline powered car,” she said.

Software engineer Nicolas Jodal drives a Tesla Model X, one of a handful of Teslas imported to South America every year. He told Detroit News that electric cars are “extremely cheap to operate. I don’t think I manage to spend 500 pesos ($12) a month” on electricity. After experiencing his Tesla, he said the internal combustion engine is “an outdated technology that has no future, at least for passenger transport vehicles.”

Uruguay exempts EVs from its 23% import duty and the excise tax on passenger vehicles. Gasoline costing about $7.40 per gallon and a growing network of charging stations nationwide have also helped make electric cars a more popular choice for its 3.5 million citizens. The most common brands of conventional cars sold in Uruguay come from Ford, Fiat, or Toyota — all of which have shunned the EV opportunity so far.

Uruguay’s use of tax incentives to boost adoption could serve as a model for other small countries that do not currently have a domestic auto manufacturing industry to protect, Rafael Rabioglio, the head of research for Bloomberg NEF in Latin America, said. Bloomberg now forecasts battery-electric and plug-in hybrid sales will total more than 400,000 this year — about 8% of the new car market in Latin America. That’s up from just 2% in 2023. “If it wasn’t for the Chinese, I’m not sure we would have seen this transition happening recently in Latin America,” Rabioglio said.

The good news is that Chinese companies are able to sell competitive electric vehicles in South and Central America at prices that are equivalent to gasoline-powered models. The not so good news is that mainstream automakers from the US and Europe are unable or uninterested in doing the same.

The region has a patchwork of import duties and EV incentives, which makes it difficult to make accurate predictions about the future of EVs there, but the transition to electric mobility has begun and shows every sign of gaining momentum, thanks to the supply of electric cars from Chinese manufacturers.