Recent headlines have been dominated by Russia’s invasion of Ukraine. Last week, my colleague Colin McKerracher considered what the war means for the automotive industry and mobility. This week, I’ll look at how, amid all the turmoil, there are reasons for optimism in unlikely places.
Somewhat quietly, electric vehicles are gaining traction in Latin America, with luxury-car buyers driving the uptick. Passenger EV sales have doubled almost every year since 2016 and did so again in 2021.
Brazil, the biggest nation in the region, accounts for more than half of Latin America’s nascent EV market. Electric vehicles were still just 0.7% of all regional car sales last year, and growth varies widely by country.
That’s quite a small share compared with China, Europe and the U.S., the world’s major EV markets. Still, incremental policy changes, improving economics, new models and expanded public-charging infrastructure point to brisk growth in Latin America through 2025.
Given the recent sales momentum and the policy environment, BNEF anticipates the region’s two largest markets, Brazil and Mexico, will see EV sales rise to 2-4% of total passenger vehicle sales by 2025.
A similar story is playing out in India, where the auto market is starting to recover from the pandemic.
EVs accounted for approximately 15,000 of the 3.1 million passenger vehicles sold in 2021, a 200% increase in sales over the previous year.
The development with the greatest anticipation is the growth in high-speed two-wheelers, which accounted for over 12.2 million sales last year. Electric variants from Hero Electric, Okinawa, Ather Energy, Ampere and a handful of others are starting to take a meaningful bite out of this market, with close to 150,000 electric scooters sold in 2021 and many more already ordered for 2022.
While the global auto industry comprises thousands of highly interconnected businesses, transport is a local phenomenon. Electrification of the auto industry will unfurl over decades and at different rates across countries. There will also be vehicle types that electrify in some geographies at much faster rates than others.
These recent sales numbers for markets that are far from the forefront of EV adoption leave me with a sense of optimism that things are starting to trend in the right direction.
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