The Global EV Outlook 2025 published by the International Energy Agency (IEA) confirms what market watchers have long anticipated: the electric vehicle revolution is no longer a question of if, but how fast and where next. With global EV sales surpassing 17 million units in 2024 and projected to exceed 20 million in 2025, the report marks a pivotal moment for the automotive sector, with notable implications for emerging markets like Latin America.

This analysis offers a global-to-local view, unpacking key findings and their relevance to policymakers, investors, and industry players in Latin America.

1. Global Momentum: Sales Scale and Market Share Hit New Records

• Global EV sales hit 17.2 million units in 2024, representing 23% of all vehicle sales.
• China accounted for over 60% of these sales (11.5 million units), maintaining its global leadership.
• Europe (3.8 million) and the United States (1.4 million) followed, with market shares of 25% and 11%, respectively.
• EV sales growth is expected to continue in 2025, with projections exceeding 20 million units and global market share approaching 27%.

The global acceleration is driven by:

• Improved battery cost efficiencies: Prices fell by 14% in 2024, reaching $110/kWh on average.
• Policy mandates and subsidies: Particularly strong in China, the EU, and select U.S. states.
• Consumer choice: The number of available EV models surpassed 600 globally, including growing options in lower-cost segments.

2. Latin America: A Market Expanding

Though still representing a small portion of global EV sales, Latin America has shown a significant uptick in 2024, especially in a handful of early adopter markets:

• Brazil saw sales more than double to ∼125,000 units, reaching a 6.5% market share.
• Costa Rica (15%), Uruguay (13%), and Colombia (7.5%) lead the region in EV penetration, aided by targeted incentives.
• Regional market share reached 4% in 2024, up from 2.5% in 2023.

Drivers of growth in the region include:

• Lower EV prices, primarily due to imports from China.
• Fiscal incentives, such as tax exemptions, import tariff waivers, and preferential treatment.
• Rising fuel prices, pushing consumers toward alternative energy options.

Still, the region faces structural challenges:

• High upfront vehicle costs remain a barrier in several countries.
• Sparse charging infrastructure, particularly outside urban centers.
• Limited local manufacturing, though that may change with Chinese OEM investment.

3. China’s Global Footprint, and Latin America’s Supply Chain Opportunity

One of the most striking insights in the report is the global dominance of Chinese automakers in EV exports:

• In Brazil, 85% of EVs sold in 2024 were Chinese brands, including BYD, GWM, and Chery.
• Chinese OEMs offer price-competitive models in key Latin American markets, drastically narrowing the price gap with ICE vehicles.
• Chinese firms are also investing locally:
  • BYD is building a new manufacturing complex in Brazil, to begin production before 2026 when tariffs resume.
  • GWM and others are exploring local assembly and strategic partnerships in Mexico and Argentina.

This raises important supply chain opportunities for Latin America:

• Countries like Chile, Argentina, and Bolivia, which hold the majority of the world’s lithium reserves, are well-positioned to integrate deeper into the global EV ecosystem.
• However, value-add still largely occurs outside the region, highlighting the need for industrial policies to develop local battery and component industries.

4. Policy Trends: What Shapes EV Adoption?

The report identifies key policy mechanisms driving EV uptake globally, and how they could be applied in Latin America:

Chile and Costa Rica stand out as countries actively linking EV strategy with climate commitments under their NDCs.

5. Future Outlook: Regional Inflection Points

While Latin America’s EV base is small, growth momentum is building, and 2025 may mark a regional inflection point:

• New model launches and greater affordability will likely continue to drive adoption.
• Brazil’s policy shift, reintroducing import tariffs in 2026, is expected to trigger a wave of preemptive investment by automakers.
• Mexico’s dual role as a manufacturing hub and EV adopter is growing, especially given its role in North American supply chains.
• Urban fleets (buses, taxis, delivery vehicles) offer high-impact deployment options for scaling EVs in dense cities.

But sustained growth will require:

• Regional coordination, to set standards and pool infrastructure investments.
• Financing solutions for middle-income consumers and public transport operators.
• A vision for local industrial participation beyond raw materials.

Key Takeaways

• EV adoption is becoming mainstream globally, and Latin America is entering the scene with increasing confidence and speed.
• Chinese manufacturers are the dominant force in LATAM’s market, reshaping price dynamics and supply chains.
• Strategic action in the next 2–3 years could determine whether Latin America becomes merely a market for EVs, or an active contributor in the global electric mobility value chain.
• With the right policy, financing, and infrastructure shifts, the region can leapfrog legacy systems and align electrification with broader climate and industrial goals.