The path to electric mobility has sped up globally over the last decade. Beyond the pace of its future evolution and the uncertainty as to the choice among the possible technological alternatives that will eventually replace internal combustion engine vehicles, the change already seems imminent and poses enormous challenges for countries. Particularly for those countries that, like Argentina, have an important local automotive industry based on traditional technologies.
Electric vehicles are gradually and increasingly penetrating the market. Global annual sales of electric cars increased from 130,000 units in 2012 to more than 6.5 million in 2021 (IEA, 2022). Although they still account for less than 9% of total sales, they have doubled 2020 figures and consistently exceeded previous year''s forecasts every year. Meanwhile, other electric vehicle segments such as motorcycles, buses and light commercial vehicles have also seen a significant increase in sales.
This growth may be explained by country motivations related to the reduction of CO2 emissions and dependence on fossil fuels, climate change mitigation and, in the case of countries with longstanding automobile industries, the need to remain competitive in this newly emerging global value chain.
Unlike China, India and developed countries in Europe and North America, the transition to electromobility in Latin America is still at a very early stage. Sales of battery electric cars (BEVs) and plug-in hybrids (PHEVs) totaled 13,898 units in 2021, almost 2x the number sold in 2020 (6,921 units). In the region, sales were led by Mexico (4,632) and Colombia (3,008), with Argentina trailing far behind, with only 62 units sold in 2021. The still marginal penetration of these vehicles is almost exclusively attributable to imports facilitated by tariff cuts and tax-exempt sales.
The transition to electromobility creates new links between transportation systems and energy systems, entails substantial transformations in the organization of global production and value chains, and paves the way for the repositioning of firms and countries as well as the emergence of new competitors. In this sense, it represents a challenge, threat and opportunity for Argentina, which has an important automotive industry in terms of employment and production.
In an attempt to respond to some of these concerns, assess the potential of Argentina''s automotive industry and the public measures and policies required, we developed a method based on the diagnosis prepared by the Council for Structural Change and Fundar''s "green" industries analysis. This method has never before been used, as far as we know, to analyze Argentina''s electromobility industry, and in our view proves appropriate to rethink a mid-term industrial and institutional policy.
BUENOS AIRES, Argentina, Jan. 15, 2020 /PRNewswire/ -- As local governments across Latin America define their electromobility strategies, original equipment manufacturers (OEMs) are framing their electric vehicle (EV) roadmap for the region. In 2018, only 23,400 hybrid EVs (HEVs) and 3,700 battery EVs (BEVs) and plug-in HEVs (PHEVs) were commercialized in Latin America. By 2025, the HEV market is expected to reach 114,700 units at a compound annual growth rate (CAGR) of 25.5%, PHEV will top 20,300 units at a CAGR of 36%, and BEV will touch more than 23,300 units at a CAGR of 49.6%.
"In recent years, there have been numerous EV-related disruptions such as e-taxi and e-bus pilot programs, fleet acquisition targets by logistics and utility companies, local design and manufacturing of fully electric micro-cars (in Mexico, Brazil and Argentina), and even some BEV carsharing and car rental services," said Martin Singla, Mobility Research Analyst. "OEMs will be looking to optimize these opportunities through collaborations and convergences with utility companies, petrol stations, mobility companies, civil associations and EV charger manufacturing companies."
Frost & Sullivan''s recent analysis, Analysis of the Latin American Electric Vehicle Market, Forecast to 2025, covers the emerging nine Latin American e-mobility markets of Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Paraguay, and Uruguay. The technology segments analyzed are HEVs, PHEVs, and BEVs in the light vehicles market. It also includes trends analyses, notable experiences, and potential market growth opportunities for corporate fleets, e-taxis, e-buses, ICE-to-BEV retrofitting startups, and micro-mobility vehicles such as e-bikes and e-scooters.
"OEMs need to engage in constant dialogue with government authorities to define regulatory frameworks and transform the constantly aging operational vehicle parc over the next decade," noted Singla. "Continued expansion of their EV offerings, incentives, customer awareness and associated charging infrastructure will be crucial for future growth."
In addition to consolidating the EV shared vision and synergies with mobility innovators, startups and associations, EV OEMs can tap additional revenue opportunities by developing strategies for high-potential countries, such as:
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