The electric vehicle landscape in the Americas is varied, with emphasis on personal transport in the north and public transport in the south. The legislative impetus also fluctuates from country to country. While Costa Rica is forging ahead with an ambitious plan to do away with gas-fueled vehicles altogether, the United States seems to be backpedaling on its environmental commitments.

North America

An electric taxi charging in Mexico City. The country also has its own EV manufacturer and the most EV sales figures in Latin America. Photo © EDGARD GARRIDO/REUTERS/Newscom

In the U.S., the federal government under the Obama administration enacted several policies to promote EVs. Efforts have also been proposed to support advanced-technology vehicle adoption through improvements to tax credits in current law, investments in research and development and competitive programs to encourage communities to invest in infrastructure supporting these vehicles.

The biggest boost Congress gave to EVs was the American Recovery and Reinvestment Act of 2009, which established tax credits for purchasing EVs of between U.S. $2,500 and $7,500 per vehicle, depending on the battery capacity, and conversion kits to retrofit conventionally powered vehicles with EV capability ($4,000 per vehicle, maximum). However, a majority of those credits have expired, but proponents of EVs said they were the cornerstone of the growing demand for such vehicles.

The credit phases out when 200,000 qualified vehicles are produced by each manufacturer and are sold in the U.S., a limit that has been met by two companies so far: Tesla and GM. According to EV website My EV, BMW and Volkswagen will keep full credits until 2023.

The first mandate in the U.S. for EV purchases took effect in 2018 under California’s Zero Emission Vehicle Program. The program, part of a policy that dates to 1990, had previously promoted EV sales in a variety of ways but now requires any automaker selling passenger cars or trucks in the state to ensure that a portion of them be BEVs, PHEVs or hydrogen fuel-cell vehicles. For each unit falling into those categories, automakers receive a credit based on the range of each vehicle, and the number of credits is required to reach a certain percent of total units sold in the state.

The percentage increases every year. It was 4.5% in 2018, 7% in 2019 and is scheduled to reach 22% in 2025. Automakers failing to comply will be fined $5,000 per credit short of the requirement. Credits earned in excess of the requirement in any year may be banked for future use or sold to other automakers.

Nine other states – Connecticut, Maine, Maryland, Massachusetts, New York, New Jersey, Oregon, Rhode Island and Vermont – have adopted California’s ZEV program. Together they represent 30% of U.S. light-duty vehicle sales.

Those mandates are now under challenge. In September 2019, the Trump administration revoked California’s ability to set its own automotive emission and fuel economy standards. The federal Environmental Protection Agency and the Department of Transportation contend that consumers would benefit from lower prices if the country had one set of national automotive standards. Also, the Department of Justice is investigating whether Ford, Volkswagen, Nissan and BMW violated antitrust rules when they agreed in July not to challenge California’s standards. 

If the revocation of California’s ability to set its own standards is allowed to stand, it would eliminate all of the ZEV mandates. California and the other ZEV states have filed a court challenge. Other automakers have sided with Trump’s administration.

Many states have adopted other types of policies encouraging purchases of EVs. California offers rebates of up to $7,000 on purchases of EVs depending on the applicant’s income and is building an extensive charging network. Thirty-nine other states also provide tax benefits or rebates for EV purchases. 

“EVs are rapidly growing, but policies still play a really important role in sending signals to the private sector that a state or city is excited to support EVs and will help the private sector,” Cassie Powers, senior program director at the National Association of State Energy Officials, told Utility Drive.

Up north, Canada had a banner year for EVs when the federal government set targets to increase sales across the country, similar to those in California. It starts small, 10% of vehicle sales to be zero-emission by 2025, eventually reaching 100% by 2040. To achieve these goals, the government has introduced incentives for purchasing EVs. Currently, EVs cost between $29,000 and $135,500. Now, the government proposes a rebate of $5,000 for battery electric or hydrogen fuel-cell vehicles costing less than $45,000. 

Over the next three years, the country will dedicate $300 million to implement the program. The government also promised to spend $130 million for EV charging and hydrogen stations across the vast country over the next five years. 

Mexico abolishes import tax for electric cars: The vehicle import tax at 15 to 20 per cent will be lifted for four years until the end of September 2024. The Mexican Ministry of Economy also stated that this would allow local companies to research market preferences while accelerating electrification.


Mexico has a handful federal and regional policies promoting EV purchases and has a small yet growing charging network of 2,017 charging points, up from 700 in 2017. About a fifth of these points are in the capital city. Sales of PHEVs are higher than BEVs due to the limited reach of the charging network.

In mid-August, the federal government exempted BEVs from import duty, and both BEVs and PHEVs were already exempt from new vehicle tax. In 2019, the government also introduced elevated federal tax benefits for EVs, capping the deduction at 250,000 pesos ($12,950) for purchases and 285 pesos per day for leases, compared to caps of 175,000 and 200 pesos per day for purchases and leases of ICE cars.

The Mexican government’s goal to combat pollution in large cities such as Mexico City, coupled with the sheer size of the country, is why it is Latin America’s second-largest automobile market of 1.53 million sold in 2018, and is leading in plug-in EV sales, with 1,785 BEVs and PHEVs (excluding Teslas, which are available) purchased. In real terms, this is small beer, but it is a step in the right direction. Mitta, a major car rental and leasing company, launched EcoMitta, a fleet of electric cars in Mexico City. 

LM&TH, a Mexican automaker, is also on the verge of launching a domestically designed and manufactured EV called the Thalia. The company aims to output 200 Thalias in the first few months of production and wants to increase that by 50 cars each month thereafter, for a purchase price of $18,500. 

South America

Chinese vehicle maker BYD makes both ICE and EV buses. The EV models are powered by a proprietary lithium-ion battery and have a range of 250 km on a single charge. Chile took consignment of 100 of them in 2019. Photo © RODRIGO GARRIDO/REUTERS/Newscom

Across South America, several countries are advancing the use of private and public EVs, albeit from small bases. In 2018, combined EV sales in six South American countries plus Costa Rica rose 90%* over 2017, to 663 in Colombia, 368 in Costa Rica, 197 in Chile, 193 in Brazil and a combined 349 in Argentina, Ecuador and Uruguay, according to Bloomberg NEF’s Electric Vehicle Outlook 2019.

At less than 1% of global EV sales in 2018, South America’s EV market is significantly smaller than East Asia, Europe and North America, but it is starting to grow, thanks to government incentives and targets, Bloomberg NEF reported It predicts annual passenger EV sales in the region will rise to 10 million in 2025, 28 million in 2030 and 56 million by 2040

Some energy specialists said that EVs face a number of challenges in the region. 

“Several factors are impeding the progress of EVs in Latin America, including upfront cost that are hefty for developing countries, subsidized fossil fuels, a lack of vehicle fuel-efficiency standards, insufficient charging infrastructure and bidding processes to procure new buses, which prioritized least cost options disqualifying cleaner technologies with higher upfront cost,” Lisa Viscidi and Guy Edwards of Inter-American Dialogue and Brown University, respectively, wrote in The New York Times. 

Government has a role to play in the increasing numbers of EVs in the region and should examine current laws and regulations in order to knock down some of those road blocks, they argued. 

“To overcome these barriers, governments need to strengthen financial incentives and standards favoring clean technologies, expand programs for electrifying high-use vehicles, develop electric strategies and goals, and create public-private partnership,” Viscidi and Edwards continued. 

Additionally, across South America, legislators are encouraging local and regional authorities to create partnerships with private utilities, automakers, bus companies and community businesses to expedite EV usage. 

Over the Bus

In July 2019, 100 brand new BYD-made electric buses were unloaded at the Chilean port of San Antonio on their way to Santiago, the nation’s capital. They are now part of the city’s growing fleet of electrified public transport vehicles. Over the next three years, Chile aims to increase the number of EVs in its 7,000 bus fleet tenfold, according to the government. 

“Chile will be second only to China as a nation with the greatest quantity of electric buses in the world,” Chilean President Sebastian Pinera said, according to a Reuters report. So far, according to Chilean officials, the buses are popular with riders because of cleaner air and lower noise levels inside the vehicle.

Chile offers exemptions from environmental taxes and traffic restrictions, as well as subsidies on EVs and recently fast-tracked licensing to cab drivers who switch to more energy-efficient vehicles. Chile’s story is emblematic of the global evolution of public transportation in general and South America specifically. 

Colombia’s ambitious target to get 600,000 EVs on its roads in the next decade is helping to push sales from such modest beginnings. The country’s leaders recently greenlighted legislation allowing for the conversion of public diesel buses to unspecified “cleaner engines.” The government also erased import tariffs for upward of 1,500 EVs annually and by 2023, the quota doubles to 3,000. City governments and manufacturers are working together to increase programs promoting electrification of high-use vehicles, specifically buses, taxis and business and government fleets.

“Chile will be second only to China as a nation with the greatest quantity of electric buses in the world.”
— Sebastian Pinera president of Chile

Costa Rica, one of the smallest automobile markets in Latin America, actually had nearly double the number of EV sales as Brazil due to several tax exemptions. The country’s legislature approved a law in 2017 exempting new all-electric cars from import duties and other taxes. Two years later, it extended that to used BEVs less than five years old. It also enacted the National Decarbonization Plan to replace 1.5 million ICE vehicles with EVs before 2050. It also funded 30 fast-charging stations across the isthmus.

Peru has no specific legislation relating to EVs, but the government has in its sights a parliamentary bill that could pave the way. From small acorns grow giant oaks, and the Miraflores municipality already has a fleet of electric motorcycles. In May 2018, lawmakers eliminated the 10% import tax for EVs. Even without that duty, cars are still too expensive for the average Peruvian.

The region’s largest vehicle market, Brazil, has a faltering EV sector despite numerous tax incentives rolled up into the Rota 2030 policy. Rota 2030 attempts to stimulate sector investment over the next 15 years and requires automakers to improve energy efficiency by 11% by 2022, reducing tax for full electrics and hybrids from 25% to between 7% and 20%, with fully electric cars and lighter vehicles benefiting more. 

Critics say the legislations are not enough to deliver the desired effect. “Unfortunately, the new Rota 2030 incentive policy is still weak,” Dalicio Guiguer, chief engineer and general director for global product programs at GM South America, told local media.

Cheap ethanol biofuel and the high price of EVs – an average of $51,000 in a country with average monthly income of $550 – hinder growth. Yet Brazil is making inroads with public EVs. Chinese vehicle-maker BYD told local government officials at its new electric bus production facility in Campinas, northwest of Sao Paulo, that the time period to recover the cost of its buses is half that of ICE equivalents, which has persuaded several South American municipalities to switch over to electrified bus fleets.

Once the largest economy in South America, Argentina has seen economic doldrums that have meant EV adoption has been slow off the mark. According to the Argentine National Congress’ website, there is scant legislation for EVs. However, there are several groups in the country pushing hard for action. The Argentine Association of Electric and Alternative vehicles, the Association of Automobile Manufacturers of Argentina and congresswoman Rosío Antinori all presented proposals for the promotion of electric and alternative vehicle uptake.

*Mexico is included and accounts for almost half, at 1,785 units, excluding Tesla.