Beatrice Lang
Costa Rica has witnessed a surge in the adoption of electric vehicles, with nearly 8,900 electric vehicles on its roads in 2023, more than double the number in 2022. This surge can be attributed to the country's commitment to renewable energy, its well-developed renewable energy infrastructure, and the government's efforts to promote clean energy and reduce carbon emissions. Costa Rica has implemented various incentives to encourage the purchase of electric vehicles, such as tax exemptions, import duty exemptions, and the development of a nationwide electric vehicle charging grid. The country's strong economic growth and stable political environment have also contributed to the growth of the electric vehicle market, with an annual growth rate of 11.49% expected between 2025 and 2029.
| Characteristics | Values |
|---|---|
| Number of electric vehicles on the road | Nearly 8,900 in 2023 |
| Electric vehicle sales in 2021 | 1606 cars, 625 motorcycles, 1,218 special use vehicles |
| Electric vehicle sales in 2022 | 1,599 units |
| Electric vehicle registrations in 2022 | Over 1,800 |
| Electric vehicle chargers | 37 quick chargers, 110 semi-quick chargers, 267 public charging locations |
| Revenue from electric vehicle sales in 2023 | $589 million |
| Projected revenue from electric vehicle sales in 2025 | $356.8 million |
| Projected revenue from electric vehicle sales in 2029 | $551.3 million |
| Projected number of electric vehicle sales in 2029 | 8,770 |
| Electricity sources | Hydro, wind, geothermal, solar |
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What You'll Learn
Costa Rica's electric vehicle market is growing
Costa Rica's electric vehicle market is experiencing significant growth, driven by consumer demand for sustainable transportation options and the government's commitment to sustainability and renewable energy. The country's well-developed renewable energy infrastructure, with over 99% of its electricity generated from renewable sources, provides an ideal environment for the adoption of electric vehicles (EVs).
In 2022, Costa Rica achieved the highest EV market share in the Americas, with a record market share of 7.3% for the all-electric light passenger vehicle segment. This leadership position continued into 2023, with a sharp rise in EV adoption. Authorities reported that EV sales are rising rapidly due to greater consumer acceptance and an expanding model lineup. Data from the Ministry of Environment and Energy showed that over 1,800 electric vehicles were registered in 2022, a more than 40% increase from 2021. The actual sales of light electric vehicles in 2022 were even higher, estimated at 1,599 units, but the number of vehicles sold and registered differed due to hacking and delays in the implementation of updated EV exemption schemes.
The Costa Rican government has played a pivotal role in promoting EV adoption through various incentives and policies. In December 2017, the Costa Rican National Assembly approved Law 9518, providing incentives for electric transportation and EV use, including tax exemptions on consumption, sales, and import customs duties. Additional incentives introduced in 2018 further enhanced the attractiveness of EV ownership, such as eliminating license plate driving restrictions, waiving yearly road permit fees, and offering free parking in designated areas. More recently, in 2023, the government approved a bill exempting electric vehicles from the general sales tax and selective consumption tax, making EV ownership even more affordable.
The country has also focused on developing its charging infrastructure to support the growing EV market. As of 2020, Costa Rica established a nationwide electric vehicle charging grid, becoming the first country in the region to achieve this feat. The government has mandated the construction of recharge centers every 80 kilometers on national roads and every 120 kilometers on regional roads to meet the increasing demand for electric vehicles. According to the Costa Rican Electric Mobility Association (ASOMOVE), there are 37 quick chargers and 110 semi-quick chargers in the country, with Electromaps reporting 142 locations and 190 connectors.
The combination of consumer demand for sustainable transportation, the government's commitment to renewable energy and decarbonization goals, and the improving EV infrastructure have collectively contributed to the impressive growth of Costa Rica's electric vehicle market. This trend is expected to continue, with projected revenue in the EV market reaching US$356.8 million in 2025 and a projected market volume of US$551.3 million by 2029.
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Costa Rica's renewable energy infrastructure
Costa Rica has a well-developed renewable energy infrastructure, which began with the construction of large hydropower dams during the last century. The country has a geographic advantage due to its high concentration per capita of rivers, dams, and volcanoes, allowing for a high renewable energy output. In addition, Costa Rica receives an average of 2,926 mm of precipitation per year, making it the fourth-highest nation in terms of rainfall per capita.
In 2016, renewable energy sources supplied about 98.1% of the country's electrical energy output. Notably, for 110 consecutive days in 2016, Costa Rica's electrical energy was derived entirely from renewable sources, despite suboptimal weather conditions. This feat was also achieved for 75 days straight in 2015, and again in 2017. The elimination of Costa Rica's military in 1948 freed up government funds, which are now invested in social programs and renewable energy generation.
Costa Rica generates its renewable energy from hydropower, wind, geothermal, and solar sources. Geothermal power, a byproduct of volcanic energy, is continuously generated and weather-independent. With six active and dozens of inactive volcanoes, Costa Rica has a natural advantage in harnessing this energy source.
The country has set ambitious carbon-free goals and has created incentives to promote the adoption of electric vehicles (EVs). In 2022, Costa Rica achieved the highest EV market share in the Americas, with a record market share of 7.3% for the all-electric light passenger vehicle segment. As of 2023, there are nearly 8,900 electric vehicles in use in Costa Rica, more than double the number in 2022. The Costa Rican government has also converted part of its fleet to EVs and offers incentives such as zero import duties for new cars.
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Electric vehicle charging stations
Costa Rica has a well-developed renewable energy infrastructure, with nearly 8,900 electric vehicles on the road in 2023, more than double the number in 2022. The country has implemented various incentives to promote the adoption of electric vehicles, including tax exemptions and import duty waivers.
The country has invested in its electric vehicle charging infrastructure, claiming to be the first in its region to have a nationwide electric vehicle charging grid. As of 2020, there were at least 120 charging locations listed on PlugShare, with the majority in the Greater Metropolitan Area, including San Jose, which has the most charging stations in the country. Electromaps reported 142 locations and 190 connectors, while the Costa Rican Electric Mobility Association (ASOMOVE) reported 37 quick chargers and 110 semi-quick chargers.
There are a variety of charging options available in Costa Rica. The most common type of connector as of July 2022 was TYPE 1 (SAE J1772), with 197 plugs registered across the country. The second most common was the NEMA 5-15 (US Plug), with 83 plugs. Many charging stations require a pass to be activated, such as the Electropass, which allows access to a maximum of charging networks.
The development of electric vehicle charging infrastructure in Costa Rica is aligned with the country's goal to enhance its "eco-friendly" image and promote green transportation. With a strong focus on sustainability and renewable energy sources, Costa Rica is encouraging the adoption of electric vehicles and providing various incentives to make them more accessible to its citizens.
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Costa Rica's electric vehicle tax exemptions
Costa Rica has implemented various tax exemptions to encourage the adoption of electric vehicles (EVs), which aligns with its green vision and carbon-free goals. These tax incentives have contributed to the country's leadership in the Latin American region regarding the market share of all-electric light passenger vehicles, including cars, SUVs, and pickup trucks.
In December 2017, the Costa Rican National Assembly approved Law 9518, which provides incentives for electric transportation and EV use. This law includes tax exemptions on consumption, sales, and customs for imports. An additional incentives package introduced in 2018 further enhanced these benefits with tax cuts on imports, the elimination of license plate driving restrictions, waived payment of yearly road permits, and free parking in designated areas.
The VAT (Value-added tax), which is typically 13% for most products in Costa Rica, will be reduced to a fixed rate of 1% during the first year following the publication of the reform. This rate will gradually increase by 1% annually until it reaches 13% in 2035. Additionally, the selective consumption tax and customs value will be exempted for three years, after which the exemptions will gradually decrease until they expire in 2034.
The Costa Rican government has also provided tax incentives for companies transitioning from gasoline-powered fleets to electric ones. This includes a waiver of the annual property tax charged within the vehicle circulation permit (marchamo) for EVs produced or assembled in Costa Rica. Moreover, EV parts, such as batteries and electric motors, are exempted from customs and VAT tax. Equipment used to assemble or manufacture EVs is also exempt from VAT if it contributes more than 20% of added value.
Costa Rica's commitment to renewable energy and well-developed infrastructure make it an attractive market for electric vehicles. The country generates over 99% of its electricity from renewable sources, including hydro, wind, geothermal, and solar power. The government's promotion of electric vehicle imports and usage, along with tax exemptions, positions Costa Rica as a leader in the EV market share in the Americas.
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Electric vehicle sales in Costa Rica
In 2022, Costa Rica had a record market share of 7.3% for the all-electric light passenger vehicle segment, which includes cars, sport utility vehicles, and pickup trucks. This placed the country as the leader in the Latin American region for EV market share. Actual sales of light electric vehicles in Costa Rica in 2022 were much higher than the 1,599 units reported by the Ministry of the Environment and Energy, due to the hacking of the Ministry of Finance customs systems and delays in the implementation of the updated BEV exemption scheme.
Costa Rica has implemented various policies and incentives to promote the adoption of electric vehicles, including tax breaks, subsidies, and the development of charging infrastructure. Electric vehicles are exempt from import taxes and restrictions on driving in San José, and the government has authorized public institutions to replace their fleets with electric vehicles. The government has also established that recharge centers must be built every 80 kilometers on national roads and every 120 kilometers on regional roads. As of 2020, Costa Rica has a nationwide electric vehicle charging grid, with 267 public charging locations across the country.
The selection of electric vehicles in Costa Rica continues to grow, with automakers ramping up EV offerings. Data from the Ministry of Environment and Energy shows that over 1,800 electric vehicles were registered with the Property Registry in 2022, an increase of more than 40% compared to 2021. In 2023, nearly 8,900 electric vehicles were in use in Costa Rica, more than double the number recorded in 2022. The country is expected to continue to see a sharp rise in electric vehicle sales, driven by greater consumer acceptance and an expanding model lineup.
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Frequently asked questions
In 2023, there were nearly 8,900 electric vehicles in Costa Rica. This is more than double the number recorded in 2022 and ten times the pre-pandemic fleet size.
The Costa Rican government has implemented various incentives to promote the adoption of electric vehicles. These include tax exemptions, the elimination of license plate driving restrictions, free parking in designated areas, and the development of charging infrastructure. The government is also actively replacing its own fleet with electric vehicles and has authorized public institutions to do the same.
Initially, consumers in Costa Rica were hesitant to adopt electric vehicles. However, with advancements in technology and increasing environmental concerns, customer preferences are shifting towards more sustainable transportation options. Buyers have overcome their initial hesitancy and now see electric vehicles as safe, practical, and environmentally friendly options.
