This article was originally written in Spanish and published on one of the most important regional blogs regarding EV adoption: AleTech. It was written, translated, and abridged by Mario Duran Ortiz, a civil engineer in Costa Rica with ample knowledge on transportation and who has been reporting on the EV transition in his country and the region. All the credit for this regional report goes to him.
By Mario Duran Ortiz
Sales of new all-electric passenger vehicles (cars, SUVs, and pickup trucks) in Costa Rica reached a record of 11,373 units in 2024, up 80% from 2023. This sales volume exceeded cumulative registrations of light-duty pure electric vehicles (BEVs) from 2010 through 2023. The segment’s market share achieved a record 15.4%, up from 11.6% in 2023, making Costa Rica the leader in all-electric car penetration in Latin America for the third consecutive year.
Sales of light-duty electric vehicles in Costa Rica are higher than formal registrations reported by MINAE (for 2024 a total of 9,647 cars plus 483 units, mainly pickups and light-duty vehicles). Since the registration process can take up to several months — until the green EV license plate is issued — there is a significant gap between the number of vehicles sold and those registered. According to AIVEMA, the number of imports is a better proxy to sales than registrations because, in general, dealer lot inventory is low.
Furthermore, as shown in the following graph, Costa Rica’s BEV market share in 2024 even surpassed the uptake achieved by Canada (10.9%) and the United States (7.8%). When accounting for plug-in hybrid vehicles (PHEVs), Costa Rica also surpassed its North American neighbors. Therefore, the Central American country achieved the largest market share in the combined EV segments (BEV + PHEV) in the Americas for the third year-in-a-row.
The graph below shows that Costa Rica, Uruguay, and Panama are the only countries located along the 45-degree diagonal line, where the BEV share is equal to the PEV share. This is because the sales of plug-in hybrids in these countries are minimal, as existing fiscal incentives solely benefit 100% electric vehicles. When considering only the BEV segment, Uruguay ranks third in the Americas, after Costa Rica and Canada, surpassing the United States.
Within the Latin American region, Colombia ranks third behind Costa Rica and Uruguay with a 4.6% BEV market share, and rises to 5.6% when PHEVs are added. Both Uruguay and Colombia significantly increased sales of all-electric vehicles compared to 2023, by 217.9% and 147.1% correspondingly. Brazil ranks fourth in the region with a 2.5% BEV market share thanks to an outstanding sales growth of 219.1% from 2023, the highest in Latam. When PHEVs are included, Brazil’s market share rises to 5.1%. Mexico also saw significant BEV growth, 165.6% from 2023, and its market share rose from 0.9% in 2023 to 2.1% in 2024, and increases to 4.7% when PHEVs are included. Sales of PHEVs in both Brazil and Mexico are higher than BEVs, as illustrated in the graph, pushing the BEV/PHEV ratio of the combined Latam countries to 54/46.
BEV sales in Chile also had strong growth, 183.8% from 2023, reaching a BEV market share of 1.5%, rising to 1.9% when PHEVs are added. The BEV share in Panama increased from 0.9% to 1.4% in 2024. Both Paraguay and Ecuador for the first time ranked among the Latam leading countries in the BEV segment in 2024, with a market share of 1.4% and 1.5% respectively, and with sales growth from 2023 of 118.3% and 85.4%, correspondingly.
As shown in the table, and within Latin American region, Brazil continued in 2024 to be the country with the most BEV sales (61,615), 3.2 times more than in 2023, and also the country that sold the most PHEVs (64,009), 1.9 times more than in 2023, for a combined record 125,624 plug-in cars. Brazilian EV sales represented 53.6% of the plug-in segment sales by volume among the leading Latam countries, and surpassed Mexico (29.7%), the second-largest automotive market in the region, by a wide margin. It is also worth noting that the market share of the Brazilian plug-in electric segment increased from 2.4% in 2023 to 5.1% in 2024.
In terms of sales volume for the BEV segment, Costa Rica is surpassed only by the large markets of Brazil and Mexico for the third consecutive year. Colombia follows with 9,193 units, Uruguay with 5,856, and Chile with 4,507 units.
Costa Rica’s successful EV adoption has been the result of the combination of three key factors: tax exemptions worth over 50% as compared to the price of fossil fuel vehicles; a wide variety of models available in all price categories since 2023; and, most importantly, the significant price reductions that took place in the most popular segments since 2023 due to increased price competition between auto dealers and cheaper direct imports from China (gray market). As widely reported by the international press, Chinese EV makers charge higher prices for exports to dealerships in Europe, Latam, and Australia as compared with prices in the local Chinese market. Direct imports or “gray market” imports consist of the direct purchase of a new EV in mainland China at local market prices by private individuals or small businesses. Then, the EVs are shipped by sea to Costa Rica, resulting in lower prices than purchasing the EV from a local dealership in Costa Rica.
Despite the exponential growth of its all-electric fleet, Costa Rica had just over 19,000 cars and light-duty vehicles in use at the end of 2024, representing only 1.3% of passenger vehicles and pickup trucks on the road. There is still a long way to go, and the country is facing several challenges in 2025 that may slow its rapid pace of adoption in the foreseeable future.
As illustrated in the graph below showing the adoption curve for new technologies, Costa Rica was at a critical threshold at the end of 2024, precisely near the end of the “early adopters” phase with a market share of 15.4%. Therefore, in 2025, it must make the leap across the always difficult “chasm” that begins after an uptake of 16.5% and between “early adopters” and the “early majority” phases. The leap is very important because the most pragmatic mass-market users are key to keeping a stable pace of EV purchases. Most countries in the Americas are still in the “innovators” or just entering the “early adopters” phase. Only Costa Rica and Canada are about to make the leap to the mainstream market.
A short-term challenge for Costa Rica in successfully bridging the “chasm” is the imminent substantial tax increase that coincides with this critical phase. As a reference point, Germany had a 24.6% plug-in electric vehicle market share in 2023, already in the “early majority” phase. However, after ending incentives in 2024, its market share dropped to 20.3% in 2024. The same experience has occurred in Sweden several times over the past 10 years. EV adoption relies heavily on fiscal incentives to match the cost of internal combustion engine vehicles.
By mid-2025, tariff exemptions will be reduced, a 7.5% selective consumption tax and 0.25% of the customs value will come into effect. In addition, at the beginning of 2025, the exemption to the annual road tax was reduced from 60% to 40%, and VAT rose from 2% to 3%. The cumulative effect of all these taxes compared to 2024 prices is around 10%, with projected price increases ranging from about US$2,000 to US$10,000 or more for the luxury segment (assuming there are no additional price increases related to the current global trade war). Sales are expected to peak before June 2025, followed by an anticipated decline due to price elasticity of demand.
Another challenge is the lack of adequate charging infrastructure. The rapid growth of the EV fleet in 2024 has outpaced the development of public fast-charging infrastructure. The most frequented stations, particularly outside the Greater Metropolitan Area, often experience EVs queuing on weekends and holidays.
Public electric utilities responsible for the national fast-charging infrastructure must enhance their maintenance practices and ensure more prompt repair services to minimize downtime at the stations. Furthermore, it is imperative to enhance the density of the fast-charging infrastructure network to reduce the distance between stations along national highways. Also, an increase of the number of charging points per station is required, especially at stations on routes to major tourist destinations, such as the Caribbean and Southern Pacific coasts.
Due to capital expenditure limits set by the national government on public electric utilities, private sector investments are crucial for expanding charging infrastructure. Although ARESEP, the national utilities regulator, has clarified that private companies can offer charging services under the current legal framework, only small investments in Level 2 charging points have been made so far. Companies looking to build fast-charging stations in Costa Rica want clear legal authorization to ensure investment security. Bill No. 24.171 presented to Congress in early 2024 aims to address this issue and is nearing approval. Though, its enactment date is still unclear.
How Costa Rica addresses these challenges could determine whether Canada or Uruguay might take the lead in EV adoption in the Americas in 2025.
Translated and abridged by Mario Duran Ortiz. Originally published by Mario Duran Ortiz for AleTech.
