Chasing (electric) cars

Uruguay takes first steps towards EVs but the rest of the region is far behind.

Volkswagen has chosen Uruguay as the main port of entry of its electrical vehicle in Latin America. Delighted with the opportunity, Uruguayan authorities have been working with the German multinational for more than seven years and, last 12 July, the president of Uruguay Luis Lacalle Pou participated in the presentation of the initiative in Montevideo.

A Professor of urban planning at a leading Uruguayan university, with knowledge of the project, explained the reality, “The [Uruguayan] government has sold Volkswagen’s initiative as a major triumph but the truth is that the government ‘bandwagoned’ on an initiative launched by Julio César Lestido S.A, [a local automobile distributor] and Volkswagen.” This was half-confirmed by an executive of a German multinational automotive group, “Large groups like Volkswagen work in alliances with local governments, and this case was no different, but other local partners were involved including Julio César Lestido S.A.

Regardless, Volkswagen will now test ten fully electric vehicles, which will travel 12,000 kilometres both in urban and rural areas prior to receiving the green light for its commercialisation in the country. These tests are expected to take place during the last quarter of 2021 with the aim of putting the vehicles on the market in early 2022.

The urban planning Professor did not foresee any problems with testing but was less sure about the adoption rate, “I’m certain the cars will pass the tests and they will be allowed to sell them in Uruguay. What I’m less sure about is how successful they will be, especially at a regional level where every country and state is politically and geographically so different.”

Uruguay’s well maintained road infrastructure was crucial to attract Volkswagen which was also impressed by the country obtaining 98% of its national energy matrix from renewable sources. If Volkswagen’s electric vehicles are approved, Uruguay will need to start a capacitation programme to train high voltage technical experts for the maintenance of these vehicles.

The Professor felt that a lack of infrastructure would be the main barrier to adoption in other countries across the region, “For electric vehicles to succeed, governments must invest in new road infrastructure and I don’t see this being a priority amid the current health crisis.”

“For electric vehicles to succeed, governments must invest in new road infrastructure and I don’t see this being a priority amid the current health crisis.”

Professor urban planning, Uruguay

The automotive executive confirmed, “Uruguay is an exception in Latin America, with the rest of the region perceived by automotive groups as not mature enough for significant deployment of EVs. This is because governments are not investing in infrastructure but also because the large automotive manufacturers do not have large EV manufacturing plants in the region, so the final price of the vehicle would be too expensive.”

At present, Volkswagen is working alongside the state’s Directorate General of Technical and Occupational Education in a common strategy to meet future potential technical skills. In this context, the Uruguayan government plans to create high specialisation centres which will potentially count with the assistance of specialists seconded by Volkswagen.

“Again, and let me insist on this point, there is a clear lack of engagement of local authorities which limits the demand for EVs in Latin America.”

Executive, German automotive manufacturer

The automotive executive summarised bluntly, “Again, and let me insist on this point, there is a clear lack of engagement of local authorities which limits the demand for EVs in Latin America. I cannot envisage any major changes in the region, regarding mobility, until 2030 at the earliest.”

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