Latin America mirrors the global trend towards EVs
Besides safety, the trends to be identified in Latin America are financial - investment - tax related first. But most of all, we cannot go without mentioning that the region is mirroring the global trend towards electrification.
The second day of the 2023 Fleet LatAm Conference started with a snapshot of the region’s economy. “While upward growth estimate revisions are expected in Brazil, Mexico and Panama in 2023, Argentina and Chile should see negative growth due to the likelihood of fiscal pressures and financing conditions,” said Moody’s VP-Senior Credit Officer Adrian Garza Patino.
Trends and evolutions in China are monitored closely across the world, and provide input in the identification of the trends that will matter to the Latin American region. “Just to give you an idea, electric vans and trucks specifically for the logistic industry in China increased 30% in the first three years, even more than the 10% seen for the commercial electric vehicle (EV) market, so urban delivery for the logistics industry in Latin America is a huge focus for us,” said Fest Auto co-founder Leslie Tan.
Nonetheless, the key players are well aware of the challenges ahead. “For a long-term business model, the strategic pillars aimed at transitioning to EVs is much more than having a product portfolio. It also entails a robust distribution network, public policy support, an overall commercial strategy, and expansive charging infrastructure,” said GM Mexico Director of Strategy & Portfolio Planning Alejandro Hernandez.
With that said, electrification remains a commercial opportunity for carmakers. “The next few years will see a huge influx of EV nameplates coming to market from both established automakers and startups. A rapid increase in EV sales is expected in the coming years, reaching almost 8% market share by 2026,” said Nissan Mexico Director of Fleet Luis Rubalcava, who specifies: "Hybrids are currently the powertrain alternative with the highest demand. However, we may see a change in the coming years if PHEVs and EVs continue their current trend,"
"In Mexico, EVs are exempt from federal law tax rate on new automobiles, which can reach a cost of 6,700 to 7,400 pesos (US$372 to US$2,078), depending on the cost of the vehicle," said ALD Commercial Director Edgar Torres.
In terms of EV charging, “while level 1 chargers are good for overnight charging (3-8km range/h charged), level 2 is good for commercial or residential establishments (64-100km range/h charged) and level 3 DC charging is good for charging along roads and highways (giving 80% charge in 30-40 minutes," said Blink Latam Business Development Manager Patricia Baires.
Regarding vehicle profiles, “executives have the most expensive cars but require the least range. Service workers require the most range and their vehicles are mid-priced, while the sales team have the least expensive vehicles and their range is between service workers and executive,” said Schneider Electric IP Sourcing Manager Karla Beltran.
In 2022, Latin America’s hybrid and EV markets were led by Mexico (33%), Brazil (30%), and Colombia (20%), with a trend moving to BEV, according to an Autorola presentation by Mexico Country Manager Alfredo Hernandez and Board Member Torben Eckardt.
The primary drivers are the target markets for Chinese brands, increased production capacity, and some (but still lacking) tax incentives, they said.
Technology & Safety
Technology can be used to reduce accidents, thus meaning that money can be saved on claims costs. During the event, Geotab AVP Sales Latin America Juan Cardona and Lytx Director Channel Sales Fernando Ferreira presented a case study on a family owned cargo transport company seeking a tool to train drivers and improve their safety as they were receiving false claims that were affecting the company's reputation and claims costs.
According to their presentation, the company achieved more than $20,000 in claims cost savings in the first two months and of the 115 drivers protected, 85% of them had a favorable opinion.
“About 80% of accidents are caused by the driver, while 9% are due to natural agents, 7% due to a failure in the vehicle, and only 4% owing to road conditions,” said Miguel Alejandro Pedroza Barra who is Partner Success Manager for Wialon-Gurtam.
To achieve sustainability, " remember that the fleet priorities of Duty of Care, TCO, the Transition to Green, Insurance Cost, and Operational Excellence are all intertwined with Driver Safety," said Octo Telematics CEO Nicola Veratelli.
Last but not least, remember to educate your drivers. “Optimizing safety requires continuous feedback to drivers, having talks to raise awareness and personal outreach, offering training programs, and leading by example,” said Mercado Libre Transportation Manager Alejandro Tonatiuh Martinez who is also the 2023 Fleet LatAm Connected Manager of the Year.