To be honest, the tax benefits in these three Latin American countries present a mosaic of strategies and challenges, some more effective than others.
Therefore, Mobility Portal Latin America breaks down each point to understand it in depth.
Brazil
In Brazil, laws and regulations on tax incentives for electric vehicles are numerous and vary by state and municipality.
At the federal level, electric vehicles are exempt from the Tax on Industrialised Products (IPI) and the Tax on the Circulation of Goods and Services (ICMS).
In addition, there are fiscal incentive programmes for clean technologies, and in 2015 the government promoted a zero-tariff subsidy for the importation of electric cars.
This move made the South American giant the largest market in Latin America, with 93,927 electric and hybrid vehicles registered in 2023, and sales are expected to increase by 60% this year.
However, Brazil’s Ministry of Development, Industry, Trade and Services (MDIC) announced in January the return of the import tax.
The resolution establishes the gradual resumption of the rates and creates initial quotas for exempt imports until 2026, when the rate will reach 35%, the same as for combustion vehicles.
On the other hand, among Brazil’s highlighted policies is the MoVer programme, which replaces the old Rota 2030, promoting the expansion of investments in energy efficiency and offering tax incentives for companies to invest in the country.
Lula signed an ordinance at the end of March to grant licences to companies in the automotive sector and financial credits to support decarbonisation.
Also, tax deductions are promoted based on the environmental footprint, incorporating the calculation of emissions from the energy source to vehicle consumption.
Mexico
Although Mexico is not known for having a wide range of benefits for eMobility, it does have some noteworthy tax incentives.
For example, the Income Tax Law allows a deduction of up to 250,000 Mexican pesos on the original investment in electric vehicles, in contrast to the maximum of 175,000 pesos for conventional vehicles.
In 2020, a decree was issued that amended the Law of General Import and Export Taxes, exempting new electric vehicles from tariff payments and offering reductions for used ones.
A measure intended to facilitate the entry of electric vehicles into the country, making their purchase more accessible.
At the state level, there are several additional incentives. In some states, electric vehicles are exempt from the tenure payment: in the State of Mexico, this fee is not paid during the first five years, and then a 50% discount is applied.
Likewise, electric cars are exempt from the Environmental Verification and the “Hoy No Circula” programme, allowing them to move without restrictions.
The Treaty between Mexico, the United States, and Canada (T-MEC) also plays a key role, offering tariff advantages and favourable regulations.
This not only reduces import and export costs but also allows Mexican companies to offer more competitive prices in the global market, fostering a conducive environment for the production of electric vehicles in North America.
Additionally, other regulations such as the Energy Transition Law (LTE) stand out, which sets goals for emission reduction and promotes the use of clean energy, including electric mobility.
On the other hand, the Electricity Industry Law regulates the generation, transmission, distribution, and sale of electricity, including the charging infrastructure for electric vehicles.
Meanwhile, NOM-001-SEDE-2020 is an official Mexican standard that establishes the technical requirements for the installation of charging stations for electric vehicles.
This regulation ensures that charging stations meet safety and efficiency standards, a fundamental axis for gaining user confidence and promoting the growth of the electric vehicle market.
Argentina
Argentina is in an early phase regarding its regulatory framework to promote electromobility.
Here, it is worth mentioning Law 27.191 of the National Promotion Regime for the Use of Renewable Energy Sources, which establishes tax benefits for the importation of electric vehicles and components.
In turn, decree 331/2017 regulates this law and establishes the requirements to access these benefits.
However, the Sustainable Mobility Promotion Bill, which proposes a comprehensive framework of incentives, is currently on standby.
The truth is that to encourage the use and marketing of environmentally friendly vehicles, 13 districts in the country have eliminated or reduced the Motor Vehicle Registration Tax, also known as a licence, for electric, hybrid, and hydrogen vehicles.
In cities like Buenos Aires, Neuquén, Entre RÃos, La Plata, Mendoza, RÃo Grande, RÃo Negro, San Juan, San Salvador de Jujuy, Santa Fe, and Ushuaia, electric vehicles are exempt from the tariff, while in Chubut and San Luis, a discount is offered.
