EV rules

Peru's electric vehicle regulation takes shape.

In early March 2021, Jaime Gálvez, Peru’s Minister of Energy announced that the regulation for electric charging stations in Peru would be approved in May. Gálvez said that the government had been working for over a year with sector stakeholders to better understand the needs and challenges of government regulation, which will be part of the objectives set in the Peru’s 2030-2050 energy transition roadmap.

A senior manager at BYD in Peru sees this as a good start but not enough, “What is missing is a complete articulation of the regulations. There are good intentions on the part of the Ministry of the Environment, the Ministry of Energy etc. but there is no State policy. The idea is that the regulations should be based on technical standards, but the sad thing about Peru is that the technical standards are non-binding.”

“There are good intentions on the part of the Ministry of the Environment, the Ministry of Energy etc. but there is no State policy.”

Senior manager, BYD, Peru

An Energy Specialist at the Asociación Empresarial para el Desarrollo e Impulso del Vehículo Eléctrico wasn’t too excited yet either, “What we have always noticed as an association is that in the preliminary draft, a thousand things are offered and when the project is ready there are 100 left. There is also a lot to consider in the regulations such as import tariffs, income taxes, depreciation, tax on vehicle assets and unit register.”

Despite this, both sources have confidence in the future of electric vehicles in Peru, the Energy Specialist commented, “I think the market in Peru might be the 3rd or 4th in the region, after Chile and Colombia, although we are still a bit far away. The good news is that many companies and car manufacturers have already realised what is coming. It is necessary to make a public document stating what has to be done to promote electromobility in the country.”

According to BBVA Peru, in 2020 the sale of electric cars in Peru experienced a 57.9% increase, but this is from a relatively low level. Consumer associations have pointed out that the main problem for the commercialisation of electric vehicles in Peru is its high cost, estimated at USD 36,000 for electrical cars.

The Automotive Association of Peru (AAP) has called on the government to offer financial assistance to potential electrical vehicle buyers. AAP argued that tax breaks and bonds should be the first step to incentivise the purchase of electrical vehicles in the country.

There is a large opportunity for electric vehicles, especially buses, to make a positive difference to public transport in some of Peru’s most polluted cities. The Energy Specialist is actively working on opportunities today, “We are working on a tender of more than USD 30 million for more than 70 buses, we are already talking with investors but financing is a challenge. The government does not guarantee anything and that makes it very risky for investors, who end up seeing this bet as project finance.”

“We are working on a tender of more than USD 30 million for more than 70 buses, we are already talking with investors but financing is a challenge.”

Energy Specialist, Asociación Empresarial para el Desarrollo e Impulso del Vehículo Eléctrico

The BYD manager sees public transport as a difficult opportunity, “I see more possibility of growth in the private sector than in public transport since the latter moves very slowly. Distances are also a problem, for example, if I want to move 200km it is fine, but if I want to go from Lima to Trujillo, a trip of 600km, I need an intermediate recharge and the charging infrastructure isn’t there yet.”

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