Just four months after tax reforms changed the rules of the game regarding what is understood as an “electric vehicle” in Ecuador, the Chinese automaker Chery announced new investments in the country, thus marking the beginning of the Free Trade Agreement (FTA) between both nations.
The Organic Law on Energy Competitiveness, enacted in January, had a direct impact on the electromobility sector by excluding extended-range vehicles from tax benefits, as they were not considered “electric vehicles” according to this new legislation.
It is noteworthy that, with the FTA reducing tariffs on imports and exports, Chery arrives with a batch of 69 vehicles, valued at around $883,846. Is this perhaps good timing for the Chinese company?
According to reports, the Asian automaker intends to export more than 6,000 vehicles to Ecuador, with a total estimated value of $83 million.
The main benefit of this bilateral trade agreement is undoubtedly the exemption from tariffs.
Cai Wenwen, Chery’s representative, announced that they will save around $21,000 for each vehicle exported to Ecuador.
This reduction in costs could translate into more affordable prices for Ecuadorian consumers, thus democratizing access to new technologies.
In light of this new scenario, Chery’s strategy includes the introduction of two new zero-emission models in Ecuador: the Tiggo 7 in its plug-in hybrid version and the S56 fully electric.
These models will add to the range of electrified vehicles in the country, diversifying the options available to consumers.
With a 60% increase in car sales in the first quarter of 2024 compared to the previous year, Chery seeks to establish itself as a key player in the Ecuadorian market.
It is worth noting that 50,814 vehicles were imported from China during 2023, representing 40.8% of the 124,544 units that entered the country from abroad, according to the annual report of the Association of Automotive Companies of Ecuador (AEADE).
Will Chery outstrip BYD in Ecuador?
Although Nissan remains the most chosen brand by Ecuadorians when purchasing their electrified vehicles, according to AEADE, it is worth noting that the figures do not discriminate against extended-range technologies.
Consequently, it is worth remembering that the Japanese brand has its X Trail E-Power model, which national legislation currently does not consider as “electric.”
Taking these parameters into account, BYD is another leader in the segment, with 327 sales during 2023 and 120 up to March of this year.
Within the Ecuadorian market, other notable brands include LeapMotor with 36 sales, Skywell with 13, and DongFeng with 12.
Jac, Neta, Jinpeng, Voyah, Zedriv, and Changan also have a presence in the country.
With a 60% increase in car sales in the first quarter of 2024 compared to the previous year, Chery seeks to establish itself as a key player in the Ecuadorian market.
It remains to be seen what the pace will be like with this new trade agreement that will shape the direction.
Read more: Trade war: EVs made in Mexico battle against USA’s “anti-China” measures
Which segments stand out the most in electric vehicles?
Like in 2023, Sports Utility Vehicles (SUVs) remain the most chosen by Ecuadorian consumers, standing out as the sales leader.
During the month of February, a total of 143 SUV sales were recorded, consolidating their dominant position in the market. So far this year, a total of 378 have been sold.
The second segment with the most prominence is cars, with a total of 35 units.
This number represents an increase of 118% compared to the same period last year.
Vans follow, with a total of two units sold, and trucks with one.
To learn more about electromobility in Latin America, visit Mobility Portal Latinoamérica.
