You’re eyeing Brazil’s electric push, but Costa Rica leads with a standout market share that eclipses Mexico. This regional momentum, powered by smart incentives and fresh imports, promises lower fleet expenses and cleaner tourist drives. Envision silent journeys through lush landscapes in a compact SUV. With tariffs on the horizon, can slower markets like Mexico rev up in time?
Step into a bustling San José port in mid-2025, where containers unload the latest Chinese models amid rising registrations. Costa Rica topped BEV penetration across the Americas last year, surpassing benchmarks in the U.S. and Canada. Latin America’s EV market doubled overall, fueled by high fuel costs and exemptions. Brazil dominated in sheer numbers, while Mexico trailed significantly. These dynamics intrigue enthusiasts planning routes and professionals mapping supplies. Now explore what drives Costa Rica’s advantage.
Costa Rica’s Policies Propel EV Leadership
A decade of bold incentives has turned a small Central American nation into the continent’s electrification pacesetter. Full exemptions on import duties, value-added tax and consumption taxes (only partially rolled back in 2025) doubled pure BEV registrations between 2023 and 2024, delivering 11,373 battery-electric units in a total market of roughly 76,000 light vehicles. That 15.4% BEV share remains the highest in the entire Americas for the third straight year (CleanTechnica, May 2025).
On a per-capita basis, Costa Rica now has one electric car for every 77 residents – miles ahead of Brazil’s one per 1,000 and Mexico’s one per 1,500.
Add reduced annual circulation taxes, free municipal parking and unrestricted access to San José’s restricted zones, and the ownership equation tilts heavily toward electrics. Fleet managers and rental operators report total-cost-of-ownership savings of 25-30% over five years on popular Chinese models like the BYD Yuan Plus and Geometry C. Early 2025 figures from the Ministry of Environment and Energy show momentum intact despite the new 7.5% VAT layer, with hybrids filling any emerging price gap.
Tourism supercharges the trend. Over three million international visitors this year are driving explosive demand for zero-emission 4×4s in Guanacaste, Puntarenas and around Arenal. If you’re flying in and want to tackle muddy volcano roads or Pacific coast runs without noise or fumes, the rental counter is now stacked with electrics. Just double-check the basics first – valid home-country license (accepted up to 180 days), minimum driver age of 21-23 and compulsory third-party liability. The clearest rundown of current car rental requirements in Costa Rica saves headaches and gets you on the road faster.
Running on a 98% renewable grid, Costa Rica’s BEV-first strategy delivers the hemisphere’s lowest well-to-wheel emissions. Few neighbors can match that combination yet.
Brazil Scales Fast, But Hybrids Still Rule the Podium
Volume remains Brazil’s calling card. The country absorbed nearly 125,000 plug-in vehicles in 2024 – more than the rest of Latin America combined – and added another 30,000 in Q1 2025 alone (ABVE data). São Paulo and Rio now host 86% of the region’s public chargers alongside Mexico, creating genuine urban viability. Chinese brands took 85% of sales, capped by BYD opening its first Latin American assembly plant in Camaçari in May 2025.
Only about one-third of those plug-ins are pure battery electrics, however. Ethanol-compatible flex-fuel hybrids continue to enjoy massive subsidies and cultural acceptance, keeping the BEV share hovering between 4-6%.
The ICCT warned in October that without sharper MOVER-program teeth, Brazil risks missing its 2050 net-zero pathway entirely: “With this delayed transition to BEVs, the national automotive industry may set transportation emissions off-course.” Local production from BYD, Great Wall and Chery will erase price parity with gasoline by late 2026, but for now hybrids dominate the sales charts.
For fleet buyers in São Paulo or Curitiba, the decision is pragmatic: wider model choice, nationwide ethanol pumps and zero range anxiety. Real-world emission cuts are meaningful, yet nowhere near what a Costa Rica-style BEV surge would achieve.
Tariffs and Policy Gaps Keep Mexico on the Sidelines
Despite building millions of internal-combustion vehicles for export every year, Mexico’s domestic EV adoption remains stubbornly low – below 3% in 2024 and showing little acceleration in 2025 (BloombergNEF, May 2025). High residential electricity rates in many states, a charging network still concentrated around Mexico City and Monterrey, and the near-total absence of consumer incentives keep prices punishing. Even though Chinese brands now undercut legacy makers by 35-40%, total plug-in sales barely topped 95,000 units last year.
USMCA trade pressures complicate the picture further. Proposed U.S. tariffs on non-compliant hybrids, combined with the end of Colombia’s duty exemptions, have policymakers scrambling, but no unified national EV strategy has emerged. The same renewable-heavy grid that makes Brazilian hybrids relatively clean sits largely untapped for pure electrics. Without a major fiscal package, analysts expect Mexico to stay a regional laggard until at least 2027.
Visitor Demand Supercharges Costa Rica’s Rental Fleets
Three million annual tourists have turned rental counters into electrification showcases. Companies in Liberia, Tamarindo, Manuel Antonio and around Arenal now stock dozens of BYD, Geometry, MG and even a few Volvo EX30s – many with AWD for volcano trails. October 2025 registrations jumped 25% month-on-month, almost entirely driven by rental-fleet replenishment ahead of high season. With occupancy rates routinely above 85% in peak months, every new electric vehicle amortizes faster than almost anywhere else in Latin America.
Costa Rica’s ~20,000-strong EV fleet may look modest next to Brazil’s 237,000, but per-capita penetration and the tourism multiplier make those vehicles highly visible ambassadors for the technology.
Electrify Your Strategy: Capitalize on Latin America’s Uneven Boom
Costa Rica proves bold policy still beats sheer size: a nation of five million now enjoys the highest BEV share in the Americas while giants play catch-up. Brazil moves the most vehicles yet dilutes climate impact with hybrids; Mexico waits for political courage.
For importers, fleet operators and analysts reading Focus2Move, the takeaway is clear – Latin America’s electric transition is real, uneven and accelerating. Monitor the next wave through our monthly LatAm reports, and if you’re headed to Costa Rica, reserve that electric 4×4 early. The green road ahead is charging up fast.
