Challenges for EV Market

Energy, Renewables    Mar 12, 2021 3:08 PM

The Colombian government wants to massify the electric vehicle (EV) market, but this industry faces some challenges to achieve this.

The government’s goal is 600,000 vehicles by 2030, but limited infrastructure and insufficient incentives are two of the main challenges to overcome, La Republica said.

Authorities have been promoting a policy of incentives for electric mobility such as a 0% tariff for EV imports, a 5% VAT, a 0% consumption tax, and discounts on the national obligatory insurance scheme (Soat) and annual technical-mechanical review.

“This commitment to electric mobility allowed the country to be the regional leader in the sale of EV in 2019,” the Minister of Mines and Energy (MinEnergia), Diego Mesa, said.

Hybrid and electric sales have been growing steadily in the country, as this increased 91% to 6,011 in 2020 compared to 2019 figures.

“Incentives are still insufficient because the cars are still expensive, and the exemptions do not make up for it. Furthermore, there are few charging stations and there are no incentives for companies to install more infrastructure,” explained electric mobility expert Julia Ortiz.

She explained that the incentives are given for the purchase of vehicles, not for building infrastructure.

“There are charging stations where two cars pass a month. If there is no consumption, how do I make more points, but without charging stations, the market does not grow,” Ortiz said.

Adriana Casadiego, Director of Peugeot, said that the company has plans to bring electric models next year, but the sector needs a more aggressive policy.

“There must be an aggressive proposal for double-track work, private business and public policy. There are incentives, but we are still lacking in terms of public policy,” Casadiego said.

Bottom-Line: Setting high goals is not enough, the sector is asking for a more aggressive public policy to meet them.

EVs are gaining strength, but they are still not competitive due to their high cost and lack of charging stations.

The government should make a greater effort on these issues, at least on the charging station problem, to see more EV in Colombia.

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