Chinese EV Manufacturers Dominate South American Market While Tesla Remains Absent

Lima:

In 2019, Peruvian green energy entrepreneur Luis Zwiebach traveled 4,000 miles to California to test drive Tesla's Model 3 sedan. Despite his enthusiasm, Tesla's absence of an official importer and Peru's complex import regulations created significant barriers.

Determined to own an electric vehicle, Zwiebach found a solution: "There was a gentleman who had already imported one and wanted to sell it. So I went to see it, and I bought it."

Initial charging challenges illustrated the pioneering nature of his purchase. At a friend's beach house outside Lima, "The car wouldn't charge because there was no grounding device," he recalled. "We grabbed a fork, stuck it into the soil to make a ground — and the car charged."

Today, the Peruvian EV market has transformed dramatically. While Tesla still lacks a local showroom, Chinese manufacturers including BYD, Geely, and GWM have entered the market, offering electric vehicles at approximately 60% of Tesla's price point. Traditional automakers like Toyota, Kia, and Hyundai have also expanded their electric offerings. Tesla did not respond when contacted for comment.

Chinese automakers are rapidly expanding across South America with both conventional vehicles and EVs. Although electric vehicles represent just a portion of the 135,394 new cars sold in Peru during the first nine months of the year, according to Peru's automotive association, sales are accelerating. Hybrid and electric vehicle sales reached a record 7,256 units during this period, a 44% year-on-year increase.

China's market presence has strengthened since the 2023 opening of the Port of Chancay, north of Lima. This Chinese-built megaport has cut trans-Pacific shipping times in half, arriving as Chinese manufacturers face increasing trade barriers in the United States and Europe.

BYD, which produces EVs, plug-in hybrids, and conventional combustion engine vehicles, plans to open a fourth Lima dealership by year-end. Meanwhile, Chery and Geely have established more than a dozen dealerships throughout Peru.

"The electric car is doing very well here, more than two new cars are sold every day," Zwiebach noted from Lima.

Growing demand has prompted him to expand his renewables business, now offering EV charger installations alongside solar panels and regenerative elevators to clients in Lima and Arequipa, including property developers, universities, and shopping centers.

"A property developer told me he'd buy the penthouse — if it came with a car charger," Zwiebach shared. "So that's what we did. You just plug it in at home, like a phone."

Chinese automakers are contending with a profit-eroding price war domestically and increasing production surpluses. Much of this excess is being exported to the Middle East, Central Asia, and Latin America, according to Felipe Munoz, global automotive analyst at JATO Dynamics.

Chinese manufacturers have "carved out space" in both electric and conventional vehicle segments, observed Martin Bresciani, president of Chile's automotive business chamber, CAVEM. "The Chinese have already demonstrated that they match global standards in quality."

Chinese brands captured 29.6% of all new passenger car sales in Chile during the first quarter of this year.

EV adoption across Latin America, including Mexico and Central America, doubled in 2024 to approximately 4%, and continues to grow, bolstered by government incentives and affordable Chinese models, according to the International Energy Agency's Global EV Outlook 2025.

Recent figures show record EV market penetration: 10.6% of new car registrations in Chile in September, 9.4% in Brazil in August, and 28% in Uruguay in the third quarter. By comparison, EVs represented approximately 56% and 51% of new vehicles registered in Europe and China by mid-2025, respectively. Japan and the U.S. showed lower rates, at around 2% and 10%.

Even in Argentina, despite economic challenges and higher trade barriers, EV sales are increasing from a low base. BYD, China's largest automaker, launched operations in Argentina for the first time in October. The company already leads electric car sales in Brazil, Colombia, Ecuador, and Uruguay.

China's success stems partly from partnerships with established local importers to offer affordable models tailored to regional preferences, according to seven dealerships interviewed by Reuters across Peru, Chile, Uruguay, and Argentina.

This transformation is particularly evident in Uruguay, where BYD ranks as the third-largest seller across all vehicle categories, behind only Chevrolet and Hyundai. China's market share in Uruguay has more than doubled since 2023, now reaching 22%.

At the entrance to Uruguay's upscale beach resort town of Punta del Este, luxury car dealer Gonzalo Elgorriaga began showcasing BYD models several years ago. While still selling European and Japanese brands, BYD now dominates his sales.

"The Chinese struck first and struck hard," Elgorriaga told Reuters from his Stars Motors dealership overlooking Mansa beach.

Chinese brands have gained credibility and scale, he explained. They work with local banks on credit offerings and promotions. Competitive pricing is crucial to their appeal, with prices for Chinese battery electric vehicles from BYD starting at $19,000 in Uruguay.

"I can buy three Chinese pick-ups for the price of two traditional brands. That's a big difference," noted another Uruguayan car dealer, Federico Guarino.

At Peru's Chancay megaport, constructed as part of China's Belt and Road Initiative, rows of white sedans and colorful container stacks have replaced the seaside restaurants that once attracted weekend visitors to the formerly quiet fishing town.

"Each ship brings 800 to 1,200 vehicles," said Gonzalo Rios, deputy manager at port operator Cosco Shipping, speaking to Reuters in October. Cosco expects Chinese vehicle arrivals to total 19,000 by year-end.

Vehicles arriving at Chancay travel beyond Peru. Cosco Shipping completed its first vehicle trans-shipment by sea in September, sending 250 cars southward to Chile, where Chinese brands captured 33% of the overall car market in July. Another trans-shipment was underway last week, moving hybrids and EVs to Chile.

Cosco has also directed shipments to Ecuador and Colombia, aiming to establish Peru as a regional distribution hub for Chinese vehicles across all powertrain types, according to Rios. Chery, which held less than 2% of Peru's EV market in September, is already utilizing this corridor to accelerate deliveries throughout the continent.

Peruvian customs data reveal that 3,057 cars arrived at the port in July alone, up from 839 in January. Peru lacks a significant automotive manufacturing industry that might object to the Chinese sales push, but elsewhere this has generated tension, particularly in Brazil.

Some Chinese companies are investing in Brazilian manufacturing facilities, incentivized by the country's tariff barriers. BYD began assembling EVs in October at Ford's former plant in Bahia, while Great Wall Motors (GWM) initiated partial production in August at a repurposed Mercedes-Benz facility.

Ricardo Bastos, Institutional Affairs Director at GWM Brazil and president of Brazil's EV association, ABVE, indicated the company plans to begin exporting vehicles from its Brazilian factory to the region by 2027—possibly sooner—leveraging favorable trade agreements with Mexico, Chile, and the Mercosur trade bloc.

"Brazil was the third country to receive a (GWM) factory after Russia and Thailand - it's a strategic decision, showing the strength Latin America has," Bastos stated in an interview.

Substantial quantities of Chinese vehicles are also being imported directly to Brazil. Earlier this year, the world's largest car-carrying vessel docked at Brazil's Itajai port, carrying approximately 22,000 vehicles, according to Reuters estimates.

Brazilian industry and labor organizations argue that China is exploiting temporarily low EV tariff barriers in South America's largest automotive market to increase exports rather than investing in Brazilian manufacturing and job creation. BYD has also faced scrutiny over reported poor working conditions at its new Bahia facility. In response, the government has moved to reinstate import duties. Tariffs on imported EVs began returning last year and are scheduled to reach 35% by July 2026 – which Bastos at GWM cited as the rationale behind establishing local production.

Brazil could soon parallel Chancay as a regional distribution center. The port of Vitoria on Brazil's southeastern Atlantic coast currently leads in national vehicle imports.

BYD's country manager for Argentina, Stephen Deng, told Reuters in October that the company anticipated arrivals from Brazil in 2027. "I think we could eventually see Argentina adopting the same EV rates that we see in Brazil," Deng said.

EV adoption still faces challenges in South America, including vast distances and inconsistent charging infrastructure, noted Bresciani, president of Chile's automotive business chamber.

"If you want to travel the entire Peruvian coast from Tumbes to Tacna, it's difficult," Zwiebach acknowledged.

"But the car costs less to run and never needs to go to the service garage."