The right incentive

Though the government has set ambitious targets to boost the number of electric cars on Colombia's roads by 2022 and 2030, these will be difficult to meet if prices do not come down and better infrastructure is not put in place.

Though rightfully proud of its flagship manufacturing plants in Bogotá and Envigado, which have churned out nearly half a million automobiles in the past five years alone, urban Colombia suffers from a surfeit of cars on the road at peak times, not to mention particularly high levels of air pollution. Sequestered in a valley, Bogotá’s air quality ranks among the lowest in Latin America despite the fact there are only 123 automobiles per 1,000 people, no accolade worth writing home about.

This is among the several reasons former mayor Enrique Peñalosa first introduced the “pico y placa” policy in 1998 to reduce congestion at peak times by limiting traffic to cars whose license plates had an odd or even number. While successful in part, partially because people would either take the bus on said days or choose to commute much earlier, or later, than normal so as to avoid paying a hefty fine, the policy still had a heavy toll on the capital’s inhabitants without alleviating the more fundamental problems facing the country’s urban inhabitants: a severe lack of reliable public transportation and the fact that commuting vast distances via automobile was never going to be a sustainable option. A significant factor in this changes with the introduction of electric vehicles, many of which can now travel 100 miles per gallon of gasoline equivalent (mpge), compared to 33/mpg of a 2018 Honda Accord, the global industry standard. This is why, in addition to adding electric vehicles to its manufacturing matrix at its Colmotores and Envigado plants—the Chevy Bolt at the former and Renault Twizy and Zoé at the latter—the country also now aspires to have 600,000 electric cars on the streets by the end of the decade through its ambitious Colombia Vision 2030.
Though Colombians are keen on sustainable solutions, reaching this target will prove a tall order, as merely 3,200 such vehicles were sold on the market between 2010-2018, 80% of which were fully electric vehicles (BEV) or hybrids (HEV), while 20% were newer plug-in hybrids (PHEV). Compared to Mexico, which has over 15,000 electric or hybrid vehicles and 900 EV charging stations, and Brazil, which is set to launch to its own domestic hybrid later this year priced at a mere USD4,000, Colombia has a great deal of work to do to meet its ambitious target.
Though consumer interest is high, the electric market suffers from high initial costs, range anxiety, and a lack of infrastructure, like charging stations. To solve this, the government has begun lowering taxes on electric vehicles, and companies such as Terpel, one of the country’s largest oil and gas operators, are building charging stations every 100-120km along the Bogotá to Medellí­n highway that are scheduled to be operational by the end of 2020. Nationwide, Terpel hopes to open more than 30 charging stations by the end of the year.
More immediate to the success of the 2030 Sustainability Vision will be the effectiveness of Law 1964, passed by President Duque in July 2019, which aims to put 6,000 electric and hybrid cars on Colombia’s streets by 2022 and ensure that 10% of its national urban public bus fleets also run on electric. To achieve this, the law offers various incentives to consumers, such as subsidized repairs, reduced car insurance (Soat), preferred parking, reduced taxes, and exemption from “pico y placa” restrictions. What, then, could possibly be the problem? With prices for electric vehicles still roughly three to five times higher than normal combustible-loving ones—not to mention that fact the entire country has merely 89 charging stations—the government and firms like Terpel have little time to waste if they are to meet their 2022 targets, much less 2030.