how-electric-vehicles-are-driving-growth-in-latin-americaElectric vehicles are quickly gaining traction all across the globe. Consumers are recognizing that battery-powered engines are not only good for the environment but can also save them money in the long run. Major automobile producers are taking note, with corporations like General Motors saying they will produce only electric vehicles by the 2030s. This emerging market seems to be a win-win for both consumers and producers. However, the largest benefactor of the shift to electric vehicles may not be producers or consumers, but instead Latin America. Here is how electric vehicles are driving growth in Latin America.

Foreign Direct Investment

Every major recipient country in Latin America saw foreign direct investment (FDI) rise in 2021, with the majority of this growth being tied to the mining and energy sectors. This is because Latin America contains some of the world’s largest deposits of cobalt and lithium, two mandatory ingredients of the lithium-ion batteries that power electric vehicles. In fact, Latin America contains the “lithium triangle” of Bolivia, Argentina and Chile where the highest lithium concentrations in the world are found. 

The Problem

Despite these vast stores of valuable minerals, many Latin American countries have been unable to capitalize on them thus far. Cobalt and lithium can be difficult to mine and store. Lithium, for example, takes 12-18 months of filtration after bringing the mineral to the surface before extraction can occur, according to Lithium Congress. While this process isn’t very capital intensive, researchers estimate it could take nearly 500,000 gallons of water per ton of lithium extracted. In one Chilean region, lithium mining resulted in the region losing 65% of its water.

For some rural communities, this simply isn’t feasible without outside investment in infrastructure.  Additionally, mining these materials poses serious health and safety risks to miners, civilians and the environment. In the United States, chemical leakage from lithium mining affects fish 150 miles downstream from a lithium mining operation, according to Lithium Congress. In order to extract these resources in a safe manner, this industry needs long-term infrastructural investment and new technology. Fortunately, due to the increase in popularity of electric vehicles, this investment is starting to flow into the region, developing new technologies to make the process safer.


Chile, one of the countries in the “lithium triangle” received a 32% increase in its FDI from 2020, bringing its total investment to $13 billion, according to UNCATD. However, not everyone celebrates this investment. Lithium mining in Chile has already placed a heavy burden on its fragile ecosystem. Many citizens are wary of investments that could increase this burden. Entire rivers are beginning to dry up in Chile due to excessive water waste from lithium mining. Without proper intervention, lithium mining is posing a direct threat to the indigenous communities across Chile that rely on natural water sources for agriculture.

Clearly, Chile needs a new mining method. Fortunately, KMX Technologies and CleanTech are teaming up to bring their proprietary Direct Lithium Extraction technology to the country’s mines. This technology could be able to minimize a mining operation’s environmental footprint, address water and other resource scarcity and make mining operations more efficient.


Argentina contains the second largest lithium reserves in the world, but like Chile, it has had trouble capitalizing on these reserves. However, this is likely to change soon. Chinese corporation Ganfeng Lithium agreed to construct a $600 million lithium plant that solar panels power entirely. This project could create 100,000 jobs in the country.

Job creation is critical for Argentina. In 2021, the country posted an unemployment rate of 10.9%, a figure well below the OECD average of 5.7% in the same year. Construction on the mine started in June 2022 and while no expected completion date has been announced, the expected production from this mine is an astounding 20,000 tons of lithium chloride per year.


In Brazil, relaxed rules on lithium exporting could draw $2.76 billion in FDI by 2030. The majority of this expected investment is predicted to go to one of Brazil’s poorest regions, the state of Minas Gerais. Approximately 1.21 million people in Minas Gerais are multidimensionally poor. The largest concentration of the multidimensionally poor in the state of Minas Gerais lives in the more rural northern regions of the state. This same area is where the largest lithium deposits in Brazil are found, along the Jequitinhonha River valley. Large-scale investment into lithium mining has the potential to completely transform this region and Brazil’s emphasis on sustainable development for Lithium projects adds a layer of protection for civilians in that area.

Lithium and cobalt mining has the potential to transform Latin American economies. While the two minerals can and have created problems for mining countries in the past, an increase in electric vehicle demand is driving corporations to solve these problems. In doing so, electric vehicles are also driving growth in Latin America, making mining cheaper, more effective, and safer. The FDI rushing into Latin America due to lithium and cobalt demand could not only transform the mining sector but most of the economy. This level of investment necessitates infrastructural investment, creates long-term jobs and could foster a competitive business environment.

Benjamin Brown
Photo: Flickr

investing in BrazilThere are numerous reasons to invest in foreign aid in general. That can include partaking in growing the global economy, promoting international human rights and opening donor countries to potential investment returns. What makes Brazil a particularly good market to invest in is its promising role in the global economy. There are several reasons why investing in Brazil is beneficial.

COVID-19 Response

As of January 2021, Brazil has the third-most COVID-19 cases worldwide. The Brazilian economy was not in its best shape at the start of the pandemic because it has not fully recovered from the 2014-2015 recession. This made the economy vulnerable to precarious economic shocks that resulted in increased poverty, unemployment and small business fragility.

The COVID-19 pandemic has left countries like Brazil with possible lasting economic damages. Many emerging and developing countries rely heavily on foreign aid for financial and humanitarian support. Offering foreign aid to Brazil will not only help pave the way for a domestic post-COVID recovery but also alleviate some of the negative impacts of the pandemic through humanitarian benefits.

Diversified Opportunities in Emerging Markets

The Brazilian economy is classified as an emerging market. Emerging markets are economies that are transitioning into a developed economy. Since the launch of the MSCI Emerging Market (EM) Index in 1988, which measures portfolio performances of emerging markets, investing in emerging countries proved to create new and diversified opportunities outside of common markets.

Market Expansion and Economic Growth

Since 2016, Brazil has shown an increase in GDP growth with approximately a 1.3% increase. In 2020, Brazil fell back into recession because of COVID-19. However, Brazil’s economy displayed growth and has played an important role in the growth of the Latin American economy as it makes up 35% of the Latin American GDP. It is approximated that the Brazilian market reaches 900 million consumers in just the Americas.

On how quickly the Brazilian economy rebounded, Bloomberg reports boosted domestic demand and exports with a 9.47% rise in economic activity index from July to September of 2020 in comparison to the previous months.

As Brazil recovers from COVID-19’s economic impact, it leaves opportunity for foreign investors to take advantage of Brazil’s growing market, especially with its low interests. Some of Brazil’s profitable sectors include real estate and agricultural goods like coffee, sugar cane, corn and soybean. Participating in these sectors expands Brazil’s domestic market and hence the world market size.

Geographical Location

Especially for the United States, Brazil’s proximity allows easier trade. For other advantages, Brazil’s geographical properties for the agriculture sector also make its commodities attractive. Approximately 28.7% of land is used for agricultural production which makes up more than 4% of the annual Brazilian GDP. Following China, the United States and Australia, Brazil has the fourth-most amount of agricultural land.

Foreign Investment Returns

Encouraging enterprises to invest in foreign aid can ultimately result in great returns. A common type of foreign aid for these corporations is Foreign Direct Investment (FDI). Through FDIs, corporations can potentially gain lasting interests, multinational consumers and flexible production costs. This type of foreign aid also brings developing countries like Brazil innovative technology, investment strategies, jobs and infrastructure from investing corporations of developed nations.

Foreign investment is critical to developing and emerging markets. Investing in Brazil promotes development and sustainability and also benefits foreign investors greatly. Furthermore, foreign investment assists economic recovery following unforeseen economic shocks like that of the COVID-19 pandemic.

Malala Raharisoa Lin
Photo: Flickr