Transition to electric vehicles in Brazil and Mexico has been driven by domestic politics and global pressures, a new study says.
Decisions have been made in both countries shaped by factors beyond emissions, costs or efficiency.
In Brazil, this has been the size of the domestic market for EVs and the domestic coalition around bio-ethanol. In Mexico, the change has been more volatile because of a greater reliance on foreign technology and the erosion of reliable access to US markets.
The research , by Renato H. de Gaspi from Johns Hopkins University and Pedro Perfeito da Silva, from the University of Exeter, says Brazil's EV growth has been driven by commodities, putting the domestically owned primary sector in a privileged position. Domestic demand has provided the manufacturing industry with a large internal market, which also attracts the interest of foreign investors.
The Brazilian government has greater bargaining power with multinational automakers—who dominate production in both countries—than their Mexican counterparts.
In Mexico, by contrast, light vehicle production is overwhelmingly export‐oriented, with 87 per cent destined for foreign markets, constraining policy leverage.
Brazil's greater flexibility toward foreign investors, combined with the influence of domestic business groups, has favoured decarbonization choices aligned with domestic market needs, such as the prioritization of biofuel‐compatible hybrid vehicles.
Dr Perfeito da Silva said: "Despite facing similar global pressures and structural constraints, the two countries have adopted distinct technological strategies even under administrations led by similar left‐wing parties. In Brazil, this reflects the alignment between long‐standing sectoral capabilities, rural‐urban political coalitions, and the structure of domestic demand. Mexico has followed a technological route shaped by the diffusion of global innovations while navigating a moment of neoprotectionism and mounting uncertainty around what was once a stable, predictable, albeit dependent export‐led model.
"Brazil has prioritized a hybrid‐ethanol strategy grounded in its longstanding ethanol infrastructure and flex‐fuel vehicle fleet. This strategy is a locally adapted response that reflects national constraints, such as the lack of public charging infrastructure."
"Mexico, in contrast, has pursued a strategy shaped by outside forces. The country's long‐standing export‐led growth model has been structured around integration with US and Canadian markets. Mexico moved rapidly to expand its capacity in BEV assembly and battery production. While recent governments have sought to increase local content and reduce technological dependency, their ability to do so remains constrained by the logic of dependent integration."
The vulnerabilities of this strategy have become especially visible. Rising protectionist pressures, such as the threat of tariffs and the phase‐out of key provisions of the Inflation Reduction Act, have introduced a new layer of uncertainty into what was once a predictable and stable external environment. Policymakers have been forced to consider a more proactive role in industrial policymaking without having built the institutional or political foundations for it.
