Electric mobility policy is already moving fast in Latin America. Numerous countries have incentives for EVs, such as exemptions or discounts on sales, environmental, and import taxes, revenue-neutral “feebates” that tax polluting cars and reward clean ones and exemptions from traffic permits and restrictions.
“I definitely expect to see growth in electric car and bus markets, as well as two-wheelers in Latin America in the coming years. Some governments in the region have very good electric transport strategies but other countries need to strengthen their broad strategy as well as specific regulations,” said Lisa Viscidi, an energy specialist at the Inter-American Dialogue.
Many barriers remain. Upfront costs are hefty for developing countries, charging infrastructure is insufficient and most of government subsidies are still allocated to fossil fuels. Overcoming these obstacles will require developing electric mobility strategies, strengthening financial incentives and lowering costs, according to experts.
Here is a snapshot of the EV market in selected countries of the region.
Chile
Since 2016, Chile has had a National Electromobility Strategy, which includes the goal of electrifying 40% of the private fleet by 2050. The government expects its public, private, and commercial fleet of EVs to reach five million by midcentury. This would avoid the emission of 11 million tons of CO2 per year, according to government estimates.
There are already 581 electric cars in the country, all of which were imported. The country also has two main fast charging corridors. One is known as VOLTEX and is located in the Central-South zone, while the second one is located in the southern part of the country and is connected to the Argentinian province of Neuquen.
Franco Basso, an EVs researcher at Valparaiso Catholic University, highlighted the steps the government has taken so far but called for more charging stations and lower prices, which he describes as the main barriers. Most electric cars can be found in Chile’s largest cities, with the Hyundai Ioniq being the best-selling model.
Argentina
Argentina does not have national legislation for electric mobility. Yet, this could change this year as President Alberto Fernández has submitted a bill to Congress that includes overall fiscal benefits for EV purchases. With about 100 electric cars and very few electric buses, the country is lagging behind compared to neighbours Uruguay and Chile.
Electric cars are still luxury cars
Ricardo Berizzo, a member of the Argentine Association of Electric Vehicles (AAVEA), said the transition towards EVs will be more difficult for Argentina, Brazil and Mexico since they are the main vehicle producing countries in the region. These three should work together as their industries are connected through imports and exports.
Three electric cars are already manufactured in Argentina. They are: Sero Electric by Movi Electric; Tito by Coradir; and Volt by Volt Motors. Imported cars are also available, such as Renault’s Kangoo ZE, Nissan’s Leaf, BYD’s E5 and Audi’s E-Tron. Chinese manufacturer Chery recently said it could start producing EVs in Argentina.
Brazil
Despite having one of Latin America's cleanest energy power grids, Brazil is lagging behind in the EV industry as the government stalls on existing policies, and there is a lack of coordination between researchers, the central and local governments, and manufacturers.
There were approximately 1,000 EVs on Brazil’s roads by December 2019, with 500 charging stations. Yet, these figures are considered way below Brazil’s potential. “Brazil is still living in the last century," said Adalberto Maluf, president of the Brazilian Electric Vehicle Association (ABVE).
Brasília had two important policies that could have stimulated the EV market: Inova Energia (2013-2017); and Rota 2030, but business pressures left EVs behind. "Lobbying has derailed the version of Rota 2030 that was approved, throwing the energy efficiency plan into the trash,” Maluf said.
The lack of sectoral incentives to lower the costs of EVs is another bottleneck. With high excise taxes, EVs still cost up to 25% more for consumers compared to fossil fuel-based vehicles, according to ABVE.
Brazil is still focused on hybrid vehicles that are fueled by ethanol and electric batteries. This strategy, however, could leave the country even further behind since the US and Europe are already moving to the full electrification of transport and implementing low emission zones. “If Brazil begins to invest a lot in the hybrid vehicle now, it might be stuck with a stranded asset,” said Tatiana Bruce, a researcher in sustainable energy systems at the University of Lisbon.
Costa Rica
EVs have been gaining ground in Costa Rica for almost three years, driven by the 2018 Incentives and Promotion of Electric Transportation Law. It establishes fiscal and non-fiscal incentives to accelerate the transition to zero-emission vehicles and promotes the adoption of EVs and the infrastructure necessary to sustain them. In 2017 there were 147 electric cars, there were 340 in 2018 and 801 in 2019, the 2018-19 jump represented a 136% year-on-year increase.
The country also has a National Decarbonisation Plan that aims to modernise the vehicle fleet, both public and private, and promote electric transport. The plan includes a set of goals, such as achieving a 70% share of zero emissions buses and taxis by 2035 and 100% by 2050. It also aims to reduce freight transport’s emissions by 20% by 2050.
Mexico
Incentives are offered for private EVs at varying levels in different states. For example, electric, hybrid and hydrogen vehicle owners do not pay the federal new car tax (ISAN, by its Spanish acronym). These incentives have given the electric and hybrid vehicle market a boost. In 2018, Mexico reported 68% growth from the previous year in EV and hybrid vehicles sales, as they reached over 17,800. In 2019, electric and hybrid vehicles from January through September show a total of 955,393 units (although this figure consists almost entirely of hybrids).
In 2018, Mexico began developing its National Strategy for Electric Mobility, aiming to reach 50% hybrid or EVs by 2040, and 100% by 2050.
According to the Mexican Association of Automotive Industry (AMIA, by its Spanish acronym) Mexico has the most extensive charging infrastructure in the region, with more than 1,000 charging stations installed around the country. But for Rodrigo Diáz, Mexico City’s undersecretary of Mobility Planning, electric cars are still targeted towards a very small and wealthy sector of the population.
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