Analysis
14 Jan 20

Fleet electrification and TCO in Latin America

When calculating total cost of ownership (TCO) for your vehicle fleet in Latin America, one growing factor to pay attention to is whether or not you should replace combustion engine vehicles with electric ones.

The main issues you need to consider are the higher initial price of these vehicles, the lower cost of energy to operate them, and the recharging infrastructure available. In this feature, we address the cost of energy in the five largest markets, Brazil, Mexico, Argentina, Colombia, and Chile.

The numbers below reflect the average per liter price of octane-95 gasoline and electricity rates per 1.5 kWh (efficiency equivalent to one liter of petrol) on 6 January, 2020.

For the latter, the average electricity consumption in households was considered as well as annual consumption of 1,000,000 kWh for business accounts. Keep in mind that electricity prices are higher if you are recharging from third party companies which mark up their prices.

In Latin America’s largest car market, Brazil, we put 1.4 liters of ethanol (efficiency equivalent to one liter of petrol) into the equation as most cars in the country are flex-fuel, meaning they accept both gasoline and ethanol.

Petrol cost 4.56 reais (US$1.21) per liter in the country and 1.4 liters of ethanol cost 4.42 reais. Meanwhile, electricity cost 1.13 reais per 1.5kWh for households and 0.93 reais for businesses, or an average of 77% cheaper.

In Mexico, gasoline cost 20.82 pesos (US$1.11) and electricity cost 2.43 pesos for households and 4.95 for businesses, making electricity 82% cheaper. And in Argentina, gasoline is 57.25 pesos (US$0.96) and electricity is 8.76 pesos for households and 5.88 for businesses, making electricity 82% less costly.

Meanwhile, a liter of petrol in Colombia is priced at some 2,449 pesos (US$0.75). As electricity is 746 pesos for both households and businesses, it is 70% cheaper than its combustion engine counterparts.

Finally, petrol in Chile is 891 pesos (US$1.15) and electricity is 203 pesos for households and 162 pesos for businesses, making electricity 79% cheaper.

Before making the jump to electrification, however, know the prices of the EV model options available in your country. Among those in Latin America are the Nissan Leaf, BMW i3, Chevrolet Bolt, Renault Zoe, Hyundai Ioniq, Tesla model 3, and others.

 

Country

How much cheaper is electric?

Savings per US$1,000 in petrol

Argentina

87%

US$870

Mexico

82%

US$820

Chile

79%

US$790

Brazil

77%

US$770

Colombia

70%

US$700

 

Authored by: Daniel Bland