Electric Cars Outsell Gasoline in Uruguay for the First Time

Uruguay · Markets

Uruguay just crossed a line that far larger car markets have not, as buyers flee the most expensive pumps in the region for cheap Chinese electric cars.

In Uruguay, electric cars have outsold gasoline models for the first time. New figures for the first five months of 2026 show roughly nine thousand five hundred fully electric vehicles registered against about eight thousand six hundred petrol ones, a quiet but striking reversal.

Electric cars now make up about forty-three percent of new-car sales, nearly double the share a year earlier. The slice taken by petrol and diesel models, where Western and Japanese brands are strongest, has slumped to thirty-nine percent from sixty-eight percent in early 2025.

The driving force is the price at the pump. Premium gasoline costs around two dollars forty a litre, the highest in Latin America, after the state, which controls fuel imports and refining, lifted prices by roughly twenty-one percent since April in the wake of the war in Iran.

Why Uruguay drivers are switching

For a foreign reader, the maths is simple. With petrol this dear, the savings from charging at home are large, and Uruguay draws almost all of its electricity from renewable sources, so that power is both cheap and clean.

Tax policy sharpens the gap further. The country waives the usual import tariff on fully electric cars and spares them an internal sales tax that conventional vehicles must pay, which narrows the sticker-price difference that would normally favour petrol models.

Chinese carmakers have seized the moment. Brands led by BYD and Geely dominate the electric segment, with a compact BYD Seagull selling for around twenty-two thousand dollars and a larger Yuan Plus near thirty-seven thousand, prices that undercut comparable Western models.

The public charging network has kept pace, reaching nearly five hundred points run by the state power utility. For working drivers the change is concrete, with one Montevideo buyer telling Bloomberg he bought a Seagull precisely so he could drive for a ride-hailing app, something he said would be unthinkable on petrol.

What the coming tax change means

The boom may be about to meet a ceiling. Finance Minister Gabriel Oddone has said the government will begin trimming some electric-vehicle tax incentives in the second half of the year, arguing the segment is now established enough to compete without subsidies.

Analysts expect a rush to buy before any new taxes bite, followed by a slowdown. One Montevideo consultant warned that some sales simply will not happen once the breaks shrink, given how much they shape the final price.

For investors, Uruguay is a useful test case. It shows how quickly high fuel costs and a clean grid can flip a car market toward Chinese electric brands, and how fragile that shift can be once the subsidies underpinning it start to fade.

The pattern is being watched across the region. Larger neighbours from Brazil to Mexico are raising tariffs to slow the same Chinese brands, so Uruguay offers an early, open-market glimpse of how far and how fast the switch can run when nothing stands in its way.

Frequently Asked Questions

Why are electric cars outselling gasoline in Uruguay?

The main reason is fuel cost, since premium gasoline runs about two dollars forty a litre, the highest in Latin America, so the savings from charging at home are large. Generous tax breaks and a nearly all-renewable power grid have pushed electric cars to about forty-three percent of new-car sales.

Which brands are leading the shift?

Chinese manufacturers dominate, led by BYD and Geely. A compact BYD Seagull sells for around twenty-two thousand dollars, undercutting Western and Japanese petrol models, while gasoline-car brands have seen their share of the Uruguayan market fall sharply.

Will Uruguay’s electric-car boom continue?

It may slow, because Finance Minister Gabriel Oddone has signalled the government will start reducing electric-vehicle tax incentives in the second half of 2026. Analysts expect a buying rush before the changes take effect, then a cooler pace once the subsidies shrink.