South America Electric Vehicles Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

South America Electric Vehicles Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The South America Electric Vehicles market was valued at USD 1.1 billion in 2020 and is anticipated to reach USD 2.4 billion by 2026, at a CAGR of about 14%.

The COVID-19 pandemic has greatly affected the automotive industry in the region as production and sales have witnessed a decline in 2020. Furthermore, the COVID-19 pandemic has a minimal effect on the South America electric vehicles market.

Over the past few years, electric vehicles (EV) have witnessed considerable growth in the region due to the need for addressing future energy requirements. The need to attain sustainable transportation plays a significant role in driving electric vehicle demand.

The electric vehicle market is coming up as an integral part of the automotive industry and represents a pathway towards achieving energy efficiency along with reduced emission of pollutants and other greenhouse gasses.

Apart from the industry’s slow and steady shift towards EVs pertaining to environmental issues, tax Benefits, rebates and subsidies are the other factors d driving the market. But lack of adequate charging infrastructure because of the market being in its nascent stage and low gasoline cost in some countries is expected to hinder marker growth over the forecast period.

Key Market TrendsCommercial Vehicles is Expected to be a Fastest Growing Segment

Bus manufacturers like BYD are entering the South American market by overcoming the challenges to replace diesel buses with battery-operated ones. BYD Auto has received orders from Argentina to become a domestic auto manufacturer and will contribute to revamping the existing bus fleets with 100% electric buses.

Over the past few years, the demand for electric trucks in the South American region has been increasing. Factors such as achieving energy efficiency by reducing emissions, the need for addressing future energy requirements, an anticipated increase in the adoption of electric trucks for logistics and municipal applications, and investments made by OEMs to start producing of electric vehicles in the region are driving the market.

• In July 2018 the Government approved the national green growth policy for 2030, with one of the goals being the introduction of 600,000 electric vehicles by 2030 by that year. More specifically, according to this policy, it is expected to deploy 400,000 electric light-duty vehicles and 13,000 trucks.
• In March 2020, BYD has received another order from Transcarsell, a public transport service provider in Ecuador for 20 electric trucks. BYD is expected to start deliveries in phases from August 2020 and finish by 2021. The company has been the largest supplier of electric vehicles in the region. Besides electric trucks, BYD has supplied electric buses and taxis to Argentina, Chile, and Colombia.

Apart from Volkswagen, the company is also enquiring Volvo, Mercedes, etc., firms to check for cost competitiveness. The demand for electric commercial vehicles is poised to grow at a faster pace owing to the rising trend toward the adoption of electric vehicles, especially from the public transportation and logistics sectors.

Colombia is Poised to Witness a High Growth Rate

Air pollution in Colombia is worsening at an exponential rate. Cities like Medellin and Bogota face high risks in terms of health and air quality. Following numerous studies from various national universities, researchers found that diesel vehicles are the primary source of pollution within Bogota. Hence, the government is taking incentives and subsidies to achieve an ambitious target of 600,000 EVs on road by 2030 to combat the aforementioned environmental issues. Primarily, tax benefits serve as the biggest incentive currently.

The government is converting the fleet of public transport buses to electric which is expected to drive the country market in coming years. For instance, In January 2021, -BYD announced that it has bagged a cumulative order to supply 1,002-unit pure-electric buses to Bogota, Colombia. These buses are scheduled to be delivered during 2021 and into the first half of 2022 and will be put into operation on 34 bus routes across five regions of the city.

Vehicle tax in the country is based on the overall valuation of the car itself, varying anywhere from 1.5% - 3.5%. However, this has been relaxed to only 1% for Electric Vehicles. In addition to tax rebates, government is also lowering electricity tariffs that would make charging EVs even more affordable. Also, major automobile companies like Renault, BMW, Hyundai, and KIA are actively introducing their electric portfolio in Colombia.

Competitive Landscape

The South America Electric Vehicles Market is dominated by few players such as Hyundai Motor Company, KIA Motors Corporation, BYD Auto, BMW Group, and Groupe Renault. The market for electric vehicles is characterized by the presence of both established companies as well as small start-ups. There are also a large number of regional players currently focusing on specific geographies. For the commercial vehicle segment, BYD and Volvo are the most active companies. BMW, Kia, Renault, Hyundai are some of the major companies which cater to passenger cars.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Hyundai Motor Company
KIA Motors Corporation
BYD Auto
BMW Group
Groupe Renault
Volkswagen AG
Nissan

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