Many countries are attempting to decarbonise their transport sector. Electrifying light/medium-duty vehicles has been a low-hanging fruit for various regions. The International Energy Agency (IEA) estimates that there are now over 16.5mn electric cars worldwide.

Nevertheless, there is a diversity of realities behind this figure. While in some countries, most of the car sales correspond to electric vehicles (EV), such as Norway (86%) and Iceland (72%), in Latin America, EV penetration is still in its infancy (less than 1%).

Latin America faces challenges like Europe, Asia, and US/Canada in its efforts to electrify cars and has a lot to learn from their experience. However, Latin America is also facing other challenges that are particular to the region. This article attempts to highlight three of these challenges.

Different EV charging connector standards
Today, there is no unique EV charging connector standard. Generally, each region uses its own standard. For instance, Europe uses the European standard; North America uses the American standard (also Tesla’s standard); China uses the Chinese standard, and so on.

However, Latin America has failed to adopt a unique regional standard due to the lack of a robust regional institution (eg the European Union). Moreover, countries have been unable to adopt a single standard within their territory. For instance, EVs sold in Chile have four different standards.

Why is this a problem? Because building a public charging network compatible with four different connectors will be economically inefficient and EV users will be unable to charge at every charging point, decreasing their access to public charging infrastructure.

EV prices, parity, and purchasing power
EV price parity with fossil fuel cars will be a defining moment. In general, forecasts predict this milestone will occur between 2024–2030.

However, these estimations are based on assumptions that do not necessarily apply well in Latin America. For instance, the cost of the vehicle varies greatly between regions. While the best-selling car price in the US is around $40,000, in Chile, the best-selling car costs approximately $11,000. Since the more inexpensive the vehicle, the higher the relative cost of the battery, the rule of thumb is that today’s cheaper fossil fuel vehicles will reach price parity later. Subsequently, EV price parity with fossil fuel cars will occur later in Latin America than in developed countries.

While price parity is an essential economic factor when considering an EV, the purchasing power might be even more relevant. In that regard, GDP per capita in Europe (the region with the largest EV sales share), is around $38,000, and the EU also offers subsidies for electric cars. On the other hand, few Latin American countries provide limited subsidies, while the average GDP per capita is $8,300.

Thus, lower purchasing power, limited subsidies and a later price parity are likely to delay EV penetration in Latin America.

Electrical capacity in households

Most EV users charge at home. As such, people unable to install an EV charger at home are unlikely to buy an electric car. Poor existing electrical infrastructure and insufficient spare capacity are the main factors hindering an EV charger’s installation. Both problems are more common in Latin America than in developed countries. For instance, while in developed countries, the average household capacity ranges between 6–12 kVA,  the typical Chilean household capacity is about 4.4 kVA.

Furthermore, in Chile, about 20% of households do not have enough power to supply a standard plug (10 Amps), and 87% do not have enough capacity to install a typical 7 kW residential charger. Finally, approximately 70% of Chilean households do not comply with electricity standards.

Bottom line
The electrification of vehicles is on its way. Many countries, mainly developed countries, have committed to phasing out internal combustion vehicles and have implemented subsidies and incentives for EVs. Moreover, most carmakers have announced plans to electrify their products.

Globally, countries face similar challenges, such as higher EV prices compared to combustion engine vehicles, lack of public charging infrastructure and limited EV models available on the market. Still, the particular difficulties in Latin America mentioned in this article may delay the roll-out of EVs in this region and make the transition to a clean economy harder.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.