South America Electric Powertrain Market Outlook, 2029

From the peaks of the Andes to the shores of the Amazon, South America's electric powertrain market marks a new chapter in the continent's automotive evolution, echoing a rich tapestry of industrial growth and environmental stewardship. Technological innovation in South America's electric powertrain market is highly proactive, although differently so in various countries. For instance, Brazil already has an established local automotive industry and isstudying opportunities in producing hybrids and electric vehicles. Other nations - Chile and Colombia, specifically - are encouraging electric mobility through partnerships with international automakers to increase their supply commitment, as well as investment in charging infrastructure.

Startups and Technology Companies at a local level, too, join the innovation race in technologies for batteries and electric drive trains by adapting these solutions to the local market conditions and consumer preference. Economic Opportunities of Electric Powertrain Adoption in South America The adoption of electric powertrains offers notable economic opportunities through value creation in new supply chains, particularly in the automotive and the energy sector. Strategic advantages in the South American region for the integration of electric vehicles in the energy system lie in the large renewable energy resources: hydropower, solar, and wind.

Countries like Chile and Uruguay are leading the way when it comes to renewable energy adoption, thus providing the ground for the growth of sustainable charging infrastructure and prospects for EVs playing a role in using excess renewable electricity generation. In this line, synergies between electric mobility and renewable energies have implications for increased energy security, reduced dependence on imported fossil fuels, and mitigation against the impacts of climate change. Electric powertrains will therefore proactively contribute to containing the problems of urban mobility within the growing cities in South America.

Municipalities are implementing smart city initiatives and strategies of sustainable urban planning, where electric mobility is key to resolving traffic congestion, air pollution, and public health challenges. Programs in São Paulo and Bogotá - where electric buses and electric taxis are being promoted - will make a difference to air quality and, particularly, offer an improvement in the quality of life of urban residents. Electric vehicles are part of integral urban transport systems for the future.

According to the report, the South America Electric Powertrain market is anticipated to grow at more than 18.8% CAGR from 2024 to 2029. The charging-infrastructure expansion is still highly prioritized, especially in those parts of rural and underserved areas that lack electricity or, at a minimum, charging facilities. Fast-charging networks along highways and urban centers are very much needed to reduce range anxiety and foster long-distance trips using an EV. Government policies and regulatory frameworks drive the market for electric powertrains in South America.

Specific incentives and regulations have been adopted by countries to support the wider diffusion of EVs, which include tax incentives, import duty exemptions, subsidies for vehicle purchases, and initiatives setting the enabling environment for market growth and investment in electric mobility solutions. These charges span national strategies on EV development, emission standards, and public-private levels related to collaboration on charging infrastructure deployment. Initiatives backing sustainable transport projects exist, particularly at the Inter-American Development Bank, while knowledge sharing, technology transfer, and capacity building for electric powertrain technologies are anchored at regional cooperation platforms.

The electric power-train market in South America has therefore become more resilient and adaptive to contingency factors within the socioeconomic arena and exogenous shocks to commodity price changes and economic volatility. This underscores that flexible regulatory frameworks, innovation of business models, and adapted strategies within infrastructure planning are conducive to the sustainable growth of electric mobility despite regional variability in market conditions and political landscapes.

Market Drivers

• Urbanization and Air Quality Concerns: Rapid urbanization and severe air pollution in major South American cities like São Paulo and Bogotá are driving the demand for electric powertrains. Governments and municipalities are seeking to improve air quality and public health by promoting cleaner transportation alternatives. Electric vehicles, with their zero-emission capabilities, offer a viable solution to reduce pollution and enhance the quality of life in densely populated urban areas.
• Government Initiatives and Incentives: Several South American governments are implementing policies and incentives to promote the adoption of electric vehicles. Countries like Chile and Colombia offer tax benefits, subsidies, and other financial incentives to reduce the cost of EVs for consumers and support the development of necessary infrastructure. These government initiatives play a crucial role in overcoming economic barriers and fostering a conducive environment for the growth of the electric powertrain market.

Market Challenges

• Economic Instability and High Costs: Economic volatility and the relatively high costs of electric vehicles pose significant challenges in South America. Many countries in the region experience economic fluctuations, making it difficult for consumers to afford EVs, which are generally more expensive than traditional vehicles. The import tariffs and the lack of local manufacturing capabilities further exacerbate cost issues, hindering widespread adoption
• Lack of Charging Infrastructure: South America faces a significant deficit in charging infrastructure, particularly outside major urban centers. The lack of a widespread and reliable charging network creates practical challenges for EV owners, contributing to range anxiety and limiting the appeal of electric vehicles. Addressing this issue requires substantial investment in infrastructure development to ensure convenient and accessible charging options across the region.

Market Trends

• Expansion of Electric Public Transport: There is a notable trend towards the electrification of public transport systems in South America. Cities like Santiago, Bogotá, and Buenos Aires are investing in electric buses and other public transit solutions to reduce urban pollution and reliance on fossil fuels. This trend not only supports environmental goals but serves as a model for other cities in the region to follow, highlighting the potential of electric powertrains in transforming public transportation.
• Local Manufacturing Initiatives: There is a growing trend towards developing local manufacturing capabilities for electric vehicles and components in South America. Countries are beginning to invest in local production to reduce costs, create jobs, and support the broader adoption of electric powertrains. These initiatives aim to build a sustainable supply chain and enhance the economic viability of the EV market in the region.

The leadership of South America in terms of passenger cars in the electric powertrain market boils down due to urban air quality concerns, government initiatives, and changing consumer preference.

Electric passenger cars obviously have an advantage in terms of producing no direct emissions at the tailpipe, thus improving urban air quality and public health. It is government incentives that really act as a driver for the mass adoption of electric powertrains across South America. For example, large metropolitan cities on the continent, such as São Paulo, Bogotá, and Buenos Aires, are experiencing high levels of pollution, pushing governments to focus on cleaner transportation solutions like electric vehicles. Tax incentives, exemptions from vehicle restrictions, and subsidies on the purchase of EVs - these perks go on. These will make the electric car more attractive to consumers based on financial reasons.

This is part of broader initiatives to reduce carbon footprints and foster sustainable mobility solutions for the heavily urbanized population. Other important aspects driving South America toward increasing electric passenger car adoption are technological improvements in batteries and related development of charging infrastructure. Better energy density and public and private networks of growing charging stations reduce range anxiety and improve the daily usability of an electric vehicle. Investments in renewable sources of energy underpin the sustainability of electric mobility solutions for the entire continent.

In South America, the market is ruled by battery electric powertrains due to severe urban air quality concerns and government activities.

Key cities such as São Paulo, Bogotá, and Buenos Aires are highly polluted, so the governments tend to focus more on less-polluting transport solutions, including electric vehicles. Thus, battery electric vehicles are neatly at an advantage: they have no tailpipe or emissions, which further improves urban air quality and public health outcomes. Government incentives are basic propellers for the adoption of battery electric powertrains in South America.

Countries such as Brazil, Colombia, and Chile offer personal tax incentives, exemptions from vehicle restrictions, and subsidies on EV purchases, thus making electric cars financial possibilities for consumers. All these incentives are basically driven by the initiatives to reduce carbon footprint and foster sustainable solutions for transport in highly urbanized areas. Technological infrastructure developments pave the way for growth in South America with regards to battery electric powertrains. Enhancing energy density in batteries and charging infrastructure lowers range anxiety and raises daily applicability. Finally, investments in renewable energies support the sustainability of e-mobility solutions on the continent

BEV is leading in the South America Electric Powertrain due to the desire to improve energy independence and reduce foreign exchange outflows.

The region also has some unique problems: scarce production of EVs locally, lower average incomes, and less developed charging infrastructure compared to more mature markets. The majority of large cities are facing extreme air pollution, which has forced governments to adopt policies allowing clean and cleaner transportation modes. Countries like Chile, Argentina, and Bolivia are rich in lithium and other battery materials, hence, looking forward to natural resources that can allow them to enter the EV supply chain and make BEVs cheaper in the future. For South America, one of the prime final targets of electrification is public transportation.

In Santiago, Chile, and Bogotá, Colombia, specifically, only electric fleets have been introduced; this allows a higher benefit of electrification to reach a bigger part of the population. Along with this, ride-sharing and delivery firms are also coming in with regard to BEV adoption. There is also still the need for fuller government incentives, better charging infrastructure, and better public awareness of the benefits associated with BEVs in a region. The general acceptance of BEVs in South America could well depend on improved availability of lower-cost models amenable to local conditions, and on the development of financing terms that put such models within reach of much more of the buying publicly.

Brazil lead the electric powertrains market due to strong focus on renewable energy in the country and the established expertise in the biofuels field .

Brazil is a country with a number of years of experience in renewable sources of energy applied to transportation, specifically ethanol produced from sugarcane. Brazil is the second-largest ethanol producer after the United States; most gasoline vehicles are flex-fuel, which means they can run with both types of fuel: gasoline and ethanol. That created a culture of sustainability and reduced dependency on sources related to fossil fuel. Brazil has been in the lead of the electric powertrains markets in recent years. The government is framing policies that spur the growth of electric vehicles, which include reduction in import duty and tax exemption.

Meanwhile, Brazil has a domestic automotive industry that includes Volkswagen, General Motors, and Ford manufacturing locally. These companies are pumping money into electric powertrains and are ready to bring new electric vehicle models within the next few years. The major factors that fuel the electric powertrains market growth in Brazil is the availability of tremendous renewable energy resources. Hosting the world's largest renewable auction program, Brazil has huge investments in wind, solar, and hydroelectric power. This helped to create a clean and reliable electricity grid, which would be fundamental for electric vehicle charging.

This unparalleled Brazilian leadership in the field of biofuels has also spawned renewable sources of energy like biomethane that could power electric vehicles. An major drivers of the Brazilian electric powertrains market include the rise of a middle class with an urban lifestyle. When people move to towns and their income increases, the need for personal mobility and transport also increases. Electric vehicles represent a clean and efficient alternative to traditional gasoline vehicles; they lend themselves very well to urban use, where air pollution and congestion are major concerns.

Years considered in this report:

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in the report:

• Electric Powertrain market outlook with its value and forecast, along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Vehicle Type:

• Passenger Car
• Commercial Vehicle

By Component:

• Battery
• Power Electronic Controller
• Motor/Generator
• Converter
• Transmission
• On-Board Charger

By Application:

• BEV
• HEV/PHEV

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. After this, the research team made primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once the research team attained the primary data, they verified the details obtained from secondary sources.

Intended Audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Electric Powertrain industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.