How Brazil and Costa Rica aim to boost EV use

DW (English)

Electrifying transport is key to reducing carbon footprints. Brazil and Costa Rica are now trying to power up their fleets with new laws that aim to remove barriers to EV use.

Transcript

00:00Are Costa Rica and Brazil in the fast lane when it comes to e-mobility?

00:06Brazil is Latin America's largest electric vehicle market.

00:09Now, after years in the fast lane, Brazilian cities are looking to hop aboard too, by electrifying

00:14their city bus fleets.

00:17Meanwhile, sets of laws from the last decade are hoping to show that removing economic

00:21barriers in Costa Rica could be the power that this small country needs when it comes

00:26to revving up its battery electric engines.

00:29Costa Rica is a small country in Latin America.

00:32We'll talk more about how that country increased electric vehicle uptake in a moment.

00:37But first, I want to show you one of the rarest cars in Costa Rica.

00:44A converted electric car.

00:48It used to be a petrol vehicle, before being converted by these two startup founders.

00:55César González-Soles and Emmanuel Castro.

00:58Besides showing that a conversion like this is possible, the co-founder's other goal

01:03is making the case that conversions of existing fleets for companies or utilities makes economic

01:07sense.

01:08They say converting can be cheaper than buying a new EV.

01:14Reduced prices puts us in a sector of the market where there are people who may not

01:19be able to buy a new vehicle, but they can opt for a converted electric vehicle.

01:26As car enthusiasts themselves, the goal was to allow people the freedom to renew the vehicles

01:30they already have.

01:32But the pair say it's difficult to do these conversions and takes time.

01:36A conversion can take about three or four months depending on the vehicle, how complex

01:41it is, all that weight distribution and design that we have to do.

01:44So it's a whole study.

01:46Sourcing parts to fit the custom builds is also an issue, but the co-founders hope that

01:51by showing off the handful of cars that they've already converted over the last year and a

01:55half, including the yellow Mini Cooper we saw earlier, that they can convince companies

01:59and cities to convert their existing fleets instead of buying new.

02:04It's a fraction of the price.

02:06If you compare cars like the Mini Cooper, it costs around $13,000.

02:11Now a Mini that comes straight out of the factory, right now, that costs between $50,000

02:16and $60,000 here.

02:21Converting existing petrol cars into fully electric ones is just one innovation.

02:26But back to those laws we told you about earlier.

02:30The way the law works is there are four different price brackets that each have different discounts.

02:35A car like this one gets 100% of its general sales, excise and customs value tax waived.

02:42That's because the Geely Geometry C starts at $27,900 USD.

02:46But 0% of those taxes get waived for values above $60,000, like for this car, the Lexus

02:52RZ450E, which falls into that most expensive bracket.

02:56The values between those two categories receive staggered reductions.

03:00This is part of the Costa Rican government's attempts to remove financial barriers to make

03:04buying new electric vehicles more appealing.

03:09We know other countries have restrictions or more taxes on combustion vehicles and punish

03:13that decision to purchase one.

03:16Not in Costa Rica.

03:19This is Silvia Rojas.

03:21She's the president of the Latin American Association for Sustainable Mobility.

03:25Other perks include free parking in some areas and waiving annual road permit fees.

03:30But how well has it worked?

03:32Reportedly, Costa Rica's market share of electric vehicles is high.

03:36We had trouble confirming official figures, but one trade magazine, Alatech, says the

03:41electric vehicle market share there is high, in 2022 between 7.3 and 7.5%.

03:50Compare that to official figures from Canada, the US, Colombia and Brazil for the same year.

04:01When the law passed in 2018, revenues in Costa Rica from the electric vehicle market were

04:05nearly $14 million USD.

04:08But the market's rising, and Statista Market Insights estimates it will be worth $321 million

04:13by 2028.

04:14Small compared to some of its neighbors, true, but not bad for a country like Costa Rica.

04:20But as the case here shows, there are plenty of people who can't afford or don't want to

04:25buy their own EVs.

04:26So how do we electrify their transport?

04:35Enter the Humble Bus.

04:40Just a few kilometers outside of Sao Paulo is a production site for the company Eletra.

04:45This Brazilian company has been making electric trolleybuses for decades, but in recent years

04:51they added 100% electric battery buses to their catalog.

04:55These buses are already on the streets of the neighboring megacity, Sao Paulo.

05:01We have 85% of the pure electric market.

05:05That's Aida Oliveira, the executive director of Eletra.

05:09She couldn't join us on site, so we hopped on a call.

05:12She knows the buses her company produces are more expensive, so that initial investment

05:16has to be worth it for city officials in the long run.

05:21If we put buses that cost three times more than diesel buses and they last less than

05:2515 years, we will undermine the transport system not only in Brazil, but in Latin America.

05:31These buses must last at least 15 years in the system.

05:38Making sure buses last is critical here in Sao Paulo, where the city banned the purchase

05:44of new petrol-powered buses in 2022.

05:53In Sao Paulo, the public transport system is composed of 12,000 vehicles that run daily

05:58all over the city.

05:59They transport an average of 7 million passengers.

06:03Paris, for comparison, has just over 2 million residents and 4,700 public buses, and earned

06:10the title of best city in Europe for public transport last year.

06:16But in Sao Paulo, which is 15 times the size of the French city of Lights, and with nearly

06:21six times as many people, buses are a major part of the transportation network.

06:26It's going to be a heavy lift to meet the ambitious goal of increasing its EV fleet

06:30to 20%.

06:34Reducing noise and pollution are additional benefits.

06:36The hitting national targets to reduce CO2 in line with the Paris Climate Accord is a

06:41factor.

06:42And Brazil, like many Latin American nations, has a relatively green electricity grid.

06:48In Latin America, 65% of electricity comes from green and renewable sources.

06:56Andres Reboedo is the executive secretary of the Latin American Energy Organization.

07:03There are countries where renewables account for nearly 100% of electricity.

07:07Paraguay, Uruguay, and at some hours of the day, Chile.

07:14Many of the countries in this region have large hydro projects and other green energy

07:18sources all contributing to a cleaner energy matrix, making the switch to electric vehicles

07:24more impactful.

07:25But this is not a simple swap over.

07:28For one, electric buses are more expensive.

07:38It has a high initial investment cost, and that's precisely because of the new technology.

07:47Before the pandemic, Miranda estimates the initial investment was twice as much as a

07:50petrol bus.

07:51Now?

07:52We have observed that the battery electric vehicle was costing three times more than

08:00a traditional diesel vehicle.

08:03He adds that new technology has also meant adoption bottlenecks, as infrastructure like

08:08electric charging garages have to be installed.

08:12There has to be all the necessary logistics, because today the logistics of diesel is much

08:17more consolidated.

08:19That's because the garages are where a great volume of fuel is consumed by each of the

08:23buses.

08:24Today, the garage itself, the concessionaire company itself, they have their own path and

08:28tanks the large distributors buy and fill them.

08:35Cost and infrastructure.

08:37These are also problems faced by customers when buying personal vehicles around the world.

08:41Beyond transport, the entire city ecosystem has to be prepared.

08:46While Eletra claims it has big market share in electric buses in Brazil, they're not

08:50the only players in the game.

08:52BYD, a well-known personal EV manufacturer, also produces electric buses, and they're

08:57now going hard on expansion into Latin America.

09:02Meanwhile, Mercedes-Benz is actually doing business with Eletra, where they are producing

09:08electric bus chassis like these in Brazil for companies like Eletra and others.

09:15The company says it already has 250 chassis circulating in Sao Paulo.

09:20We believe it's a decade of the bus.

09:22That's Achim Puschert.

09:24He's the president at Mercedes-Benz Brazil and the CEO of Mercedes-Benz Latin America.

09:29So we see a stronger need in public transportation, and we expect it also here in Latin America

09:36to grow significantly towards 2030.

09:40And I think in general, you have to understand like with one bus, you can capture 50 cars.

09:47While the personal EV market relies heavily on imports, Puschert says increasing domestic

09:52production for electric buses will be important.

10:00I think it's a great opportunity, though, that maybe is missed at the moment, because

10:04if you have natural resources that allow hydrogen production, or if you have the ingredients

10:10for lithium, like for instance, Argentina, for battery production, obviously that could

10:15also stimulate to do it locally.

10:17In the end, I believe Brazil or Argentina, they will not win if you import all the components

10:22or the vehicles, but you should rather see that you develop the local industry and then

10:27utilize the natural resources in other countries.

10:31Just like with personal electric vehicles, increasing domestic solutions is seen as critical

10:36for the future production of e-buses.

10:41So are Costa Rica and Brazil in the fast lane when it comes to e-mobility?

10:47Government policy in Costa Rica is one contributing factor to an uptake in EV purchasing, while

10:52startups like Electroconversiones de Costa Rica hope that they can push a different bracket

10:57of car owner to be able to sport green license plates like these.

11:02Meanwhile, megacities in Brazil are investing more in electric buses, which capitalize on

11:07rich and diverse green energy sources.

11:10But even though the speed is picking up, the road is a long one.

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