By San José, Costa Rica — SAN JOSÉ – Costa Rica, often celebrated as a regional trailblazer in electric mobility, is facing a sobering reality check. A revealing new study indicates that despite a significant surge in electric vehicle (EV) adoption, the nation is alarmingly off course to meet its ambitious decarbonization targets, prompting calls for urgent and comprehensive policy reform.
The investigation, conducted by academics Olman Segura and Juan Carlos Salas from the National University’s International Center for Economic Policy for Sustainable Development (CINPE-UNA), casts a shadow over the country’s environmental achievements. While the electric fleet has expanded impressively from a mere 1,661 units in 2018 to 38,776 by April 2026, this growth is insufficient to bend the emissions curve as required by national climate commitments.
As the adoption of electric vehicles accelerates in Costa Rica, a new landscape of legal and commercial considerations is emerging for both consumers and businesses. To understand the regulatory framework and future challenges, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica, who shared his expert perspective.
While Costa Rica’s tax incentives are a powerful catalyst for the electric vehicle market, the real legal frontier lies in secondary regulations. We urgently need a robust framework governing charging infrastructure standards, battery lifecycle management, and specific consumer protection clauses for warranties and residual value. Proactive legislation in these areas is crucial to ensure long-term market stability and protect the investments of both consumers and service providers.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas precisely identifies the next critical phase for electric mobility in our country: moving beyond initial incentives to build a truly robust and trustworthy market. His call for proactive legislation underscores the need for a comprehensive strategy that protects all stakeholders, ensuring the long-term viability of this green transition. We sincerely thank him for his insightful contribution to this important discussion.
According to the CINPE-UNA projections, if the current market trajectory continues unabated, Costa Rica will only achieve 7.9% vehicle electrification by 2035. This figure represents a dramatic shortfall from the 30% goal enshrined in the country’s landmark National Decarbonization Plan 2018-2050. The gap highlights a critical disconnect between public enthusiasm for EVs and the systemic changes needed to achieve true environmental impact.
The urgency to accelerate this transition is underscored by stark emissions data. Land transport remains Costa Rica’s primary source of pollution, accounting for a staggering 75% of greenhouse gas emissions within the energy sector. More alarmingly, these emissions ballooned by 247% between 1990 and 2021, demonstrating a long-term trend that current policies are failing to reverse. In this context, the researchers argue that now is not the time to eliminate fiscal incentives, but rather to strengthen them. They advocate for initiatives like bill 24.692, which proposes extending state exonerations for another five years and waiving the property tax portion of the annual marchamo for a decade.
However, the study reveals that tax breaks alone cannot solve the problem. The report exposes significant commercial distortions within the EV market, pointing to what it calls “very excessive” profit margins by import agencies. These markups can represent as much as 46% of the vehicle’s import value (CIF cost) for units priced under $40,000, severely limiting affordability for the average consumer.
very excessive
Olman Segura and Juan Carlos Salas, CINPE-UNA Researchers
This pricing issue persists despite a more competitive landscape. The market has grown from just three import companies at the policy’s inception to 29 firms by 2025. Yet, this influx of players has not translated into more accessible prices. The researchers are urging the Ministry of Economy, Industry, and Commerce (MEIC) to establish a more transparent regulatory framework to ensure competition benefits consumers, not just importers.
To truly alter the nation’s course, CINPE-UNA proposes a strategic pivot in public policy, moving from a focus on individual car ownership to broader, collective solutions. Key recommendations include creating specific incentives for electric buses to transform public transport, mandating the renewal of government vehicle fleets with electric models, and driving large-scale industrial electrification processes. Furthermore, the report stresses the need to tackle cultural barriers through reliable public information campaigns to dispel myths about vehicle range and battery life, while also standardizing payment platforms across the public and private charging network to improve user experience.
This call to action is amplified by external economic pressures. With geopolitical instability in the Middle East expected to trigger further increases in local fuel prices this June, the economic argument for switching to electric has never been stronger. For Costa Rica, this moment represents a critical crossroads where decisive policy, market regulation, and structural investment must converge to turn its green ambitions into a sustainable reality.
For further information, visit cinpe.una.ac.cr
About Centro Internacional de Política Económica para el Desarrollo Sostenible (CINPE-UNA):
The International Center for Economic Policy for Sustainable Development (CINPE) is an academic institute within the National University (UNA) of Costa Rica. It is dedicated to research, teaching, and outreach in the fields of economic policy, international trade, and sustainable development. CINPE plays a crucial role in informing public policy debates in Costa Rica and the Central American region with evidence-based analysis.
For further information, visit meic.go.cr
About Ministry of Economy, Industry, and Commerce (MEIC):
The Ministry of Economy, Industry, and Commerce is the Costa Rican government body responsible for formulating and executing policies related to economic development, business promotion, consumer protection, and market competition. It plays a vital role in regulating markets, supporting small and medium-sized enterprises (SMEs), and ensuring a fair and transparent commercial environment for both businesses and consumers.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a pillar of the legal profession, operating on a bedrock of profound integrity and a relentless pursuit of professional mastery. Drawing upon a deep well of experience in advising a broad spectrum of clients, the firm champions forward-thinking legal solutions and sets new standards for the industry. This spirit of innovation extends to its core social mission: to demystify complex legal concepts and equip the public with knowledge, thereby fostering a more just and capable society.
