By Alexander Ubaldo Gutiérrez, Fundación Internacional Bases
The oil reserves of countries such as Venezuela, Brazil, Mexico, Argentina, Colombia, Ecuador, and Guyana are a competitive advantage for our region. However, political, climatic, and territorial barriers have led us to evaluate the usefulness of this resource in transport activity. Freight transport in Latin America is responsible for 40% of global carbon dioxide (CO2) emissions. This indicator leads decision-makers and researchers to establish actions in international cooperation instruments such as Nationally Determined Contributions and National Adaptation Plans for Climate Change.
Based on this context, electric mobility, an approach to sustainable mobility that integrates the use of electricity to drive the engines of means of transport, is promoted. Not only to reduce greenhouse gas (GHG) emissions but also to promote multiple business models such as the integration of renewable energies in the energy matrix, the construction of charging infrastructure or electric charging stations, the manufacture and recycling of batteries, data collection, the development of mobile applications and the installation of sensors to measure CO2. Electric mobility is one of the main pillars of the global energy transition. In some Latin American countries, the consumption of petroleum derivatives in transport generates more than 40% of emissions in the energy sector.
Currently, 16.5 million electric vehicles are on the world’s roads. China accounts for 48% of this figure. Latin America does not exceed 5%. However, our countries have taken significant steps by creating public policies for introducing electric vehicles in public transport fleets and expanding the offer with more than 70 models available.
There is still a long way to go for the development of electric mobility in Latin America, but what are our main challenges?
Latin America has experienced the highest growth in vehicle registration in the world; more than 50% between 2005 and 2015. It is also the second most urbanized region globally; 81% of the population lives in urban areas. Thus, it is not surprising that citizens in Bogotá, Lima, Medellín, and Quito use public transport for more than half of their daily trips. In Mexico City and Panama City, public transport accounts for more than 70% of daily trips. These data reveal our first challenge: the implementation of electric mobility in public transport using passenger vehicles or electric trains to protect the air quality of our cities.
There is a standard gap of B/.12,000.00 between the price of internal combustion vehicles and electric vehicles. The cost of the battery is a key element to ensure that this amount is reduced. Li-ion batteries, currently the most efficient batteries, have lithium as their main component. The market value of Li-ion batteries is estimated to be B/.70 billion by 2026. Bolivia, Argentina, and Chile hold the world’s three largest lithium reserves, totaling 49.9 million tonnes.
From this favorable outlook for Latin America arises our second challenge: to ensure sustainability in the extraction of lithium and innovation in the manufacture of batteries, so as to reduce both the environmental impact and the price of electric vehicles. Furthermore, these actions must be complemented by recycling batteries to promote their second use and encourage the circular economy in electric mobility.
The lack of charging stations for electric vehicles or charging stations for electric vehicles is often one of the main fears of a potential buyer. However, a 37% growth in installed units has been reported for 2021, totaling 1.8 million worldwide. The US Department of Energy forecasts a 38% increase in energy consumption due to the introduction of electric vehicles. This indicator could have a negative effect on Latin American countries whose energy matrix depends on fossil fuels.
Therefore, our third challenge is to prioritize the development of off-grid or renewable energy charging infrastructure, as well as to explore vehicle-to-grid (VG2) technology, which allows the driver to sell energy to the grid.
Undoubtedly, to address the three challenges mentioned above, innovation is the main tool, as since 2010 E-hailing technologies (mobile applications and platforms such as Uber, Bird, and Rappi), semiconductors (chips), and AV sensors / ADAS components (multi-vision cameras, sensors to perceive the environment and hardware solutions) are the focus of investments in the mobility sector, totaling B/.124.2 billion. This underpins our fourth and final challenge: updating curricula and human capital training to increase Latin America’s participation in the development of electric mobility.
Latin America has all the tools and potential to position itself in the electric vehicle market. Although the political, climatic, and territorial barriers to fossil-fuelled transport still remain, the socio-economic benefits of this technology and its progressive improvements will make it a battle for sustainable mobility.
Alexander Ubaldo Gutiérrez is currently an Intern at Fundación Internacional Bases.