In 2019, Peruvian entrepreneur Luis Zwiebach sought to buy a Tesla Model 3 but faced barriers due to the absence of an official Tesla importer in Peru and complex import procedures. Undaunted, he located a used Tesla and purchased it, overcoming initial charging challenges by improvising a grounding solution. As of now, the landscape for electric vehicles (EVs) in Peru has improved significantly, despite Tesla’s lack of a showroom. An influx of Chinese brands like BYD, Geely, and GWM has emerged, offering EVs at prices roughly 60% cheaper than Tesla models, alongside traditional manufacturers like Toyota, Kia, and Hyundai.
Sales of hybrid and electric cars in Peru have been on the rise, hitting a record 7,256 units in the nine months leading to September, representing a 44% annual increase. The opening of the Port of Chancay has facilitated this growth, reducing shipping times significantly. BYD plans to open a fourth dealership in Lima, while other Chinese manufacturers have expanded their presence across the country. Zwiebach remarked on the solid performance of electric vehicles in Peru, which reportedly saw over two new EVs sold daily. This growing demand has propelled him to expand his business in renewable energy, offering electric vehicle charger installations and solar panels.
Moreover, many Chinese car manufacturers are experiencing a surplus due to increased production and domestic price wars. Their expansion strategy capitalizes on venturing into markets like Latin America, where they are gaining traction through partnerships with local importers. The International Energy Agency noted a surge in EV adoption across Latin America, reaching approximately 4% penetration by 2024, thanks in part to government incentives and affordable models. Recent statistics indicate significant EV market shares in various Latin American countries, with Chile at 10.6%, Brazil at 9.4%, and Uruguay at 28%, surpassing all previous records.
In Argentina, BYD has begun operations, reflecting its leadership in other Latin American markets. Chinese brands successfully customize their offerings for local markets, thus enhancing their competitiveness. This strategic move is highly visible in Uruguay, where BYD ranks as the third-largest seller among all car types. The Chinese automotive industry’s credibility has increased, with local partnerships enabling financing options and promotions. Competitive pricing has also attracted buyers, making Chinese models significantly more affordable than traditional vehicles.
In Peru, the Chancay megaport, a result of China’s Belt and Road Initiative, has transformed logistics, with a sharp increase in imports from China. Cosco Shipping has been instrumental, handling substantial vehicle shipments, signaling Beijing’s intent to establish Peru as a distribution hub for its automotive exports further south to Chile and beyond. The Chinese automaker Chery has been utilizing this route to boost its market presence in Peru, where it previously held a minor share.
Peru’s custom data reveals a dramatic rise in vehicle imports, showing the growing attractiveness of Chinese automobiles without significant pushback from a non-existent domestic automotive industry. However, concerns surface in Brazil, where local industry groups express worries about Chinese exports outpacing local manufacturing investments. Several manufacturers are now establishing factories in Brazil to circumvent tariff barriers and adapt to the market, seeing Brazil as key to South America’s automotive future.
Meanwhile, potential changes in EV tariffs loom in Brazil, with a gradual reintroduction of import duties, leading manufacturers to prioritize local assembly as a viable long-term strategy. This situation might position Brazil similarly to Peru as a regional vehicle hub.
Despite significant strides in EV adoption in South America, challenges remain, particularly concerning infrastructure and geographic limitations. Zwiebach highlighted the complexities faced when traveling long distances across Peru, citing the convoluted charging network. However, he remains optimistic about EV ownership, emphasizing lower operational costs and reduced maintenance needs.
With information from Reuters
