New Research: Economic Viability of Electric Vehicles Strong and Improving in Many Developing Countries

The World Bank has just published a new study on how developing countries can switch to electric mobility. The 228-page in-depth study explores cost-effective starting points for developing countries to meet their electrification goals and align on a net-zero carbon trajectory. Some of the entry points explored in the research are electric buses, which cover long miles and offer high occupancy, and 2- and 3-wheel electric vehicles, which also bring development benefits.

Electric vehicles are one of the most talked about instruments to put the world on a zero carbon path. In low-emission developing countries, the transition to electric vehicles has added benefits, such as improved local air quality, last-mile connectivity in remote locations, and reduced dependence on electricity. imported fuel.

Despite the obvious benefits, the transition to electric vehicles is relatively weak in developing countries. In 2021, there were around 6.6 million electric vehicle sales, with the bulk of those sales concentrated in China, Europe and the United States. With electric vehicles sometimes costing more than 70% more than conventional vehicles, this creates a huge financial barrier for the average consumer in developing countries.

The new World Bank report, titled The economics of electric vehicles for passenger transport, found that in many markets, the savings in fuel and maintenance costs over the lifetime of an electric vehicle more than offset the relatively high purchase price. Moreover, taking into account the health and environmental benefits, the case for electric mobility was already strong in about half of the countries surveyed.

Once the viability of electric vehicles and the addition of charging infrastructure become more available, prices are expected to continue to decline by 2030.

“We already knew that a transition to e-mobility was important; with this research, we now know it is doable,” said Riccardo Puliti, vice president for infrastructure at the World Bank. “Our report makes it clear that all countries need a plan to integrate electric vehicles into their sustainable mobility strategies.”

Highlighting the economic case for electric mobility, the research also shows that there are several steps governments and financial institutions can take to accelerate the transition to electric vehicles. The study shows that charging infrastructure can be up to 6 times more effective in encouraging EV purchases than subsidies. Leasing programs and battery recycling, as well as the provision of additional commercial finance in the market, have helped establish a transition to electric mobility.

The World Bank is already working with many client countries, including Senegal, India, Egypt and Brazil, Chile, Colombia, Rwanda and the Philippines on projects to advance their electric mobility. One of the areas of the transition to electric vehicles that they are focusing on is the integration of electric buses into the public transport systems of large cities, while making electric 2 and 3 wheelers an affordable and clean alternative to the motorization.

“Mobility is a fundamental lifeline that connects people to jobs, education, essential services and opportunity. But every year, 7.8 million years of life are lost due to health complications resulting from air pollution. There is an urgent need to reduce transport emissions, and all transport decarbonisation tools – including e-mobility – are on the table,” says Cecilia M. Briceno-Garmendia, Senior Economist for the Global Transport Practice at the World Bank and lead author. of the report. “For developing countries, the transition to e-mobility is no longer a question of ‘if’, but of ‘how’ and ‘when’.

Source: World Bank

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