20 Mar 24

LatAm: The road to carbon cero fleet progress, but the journey is long

Latin America is gradually transitioning towards electric fleets, leaving combustion-powered vehicles behind. This shift is primarily fueled by increased demand from business executives and companies in sectors such as logistics, last-mile delivery, and food and beverage.

However, achieving this objective entails overcoming several challenges in the region. These include the need for improved electric energy infrastructure, increased charging points, and the implementation of public policies that encourage the adoption of sustainable fleets.

These were among the key points discussed by experts and industry leaders during the “Fleet Latam Expert Meeting: The Road to Your Carbon Zero Fleet”.

Last-mile boost electromobility

“In Mexico, electromobility is happening in two aspects: one by company executives who are changing their internal combustion cars to electric cars, and the charging is done in residential buildings,” Jorge Jiménez, EV Lead for Mexico at Element said.

The second aspect driving electromobility in Mexico is from companies engaged in last-mile delivery, where vehicles cover daily trips of around 50 kilometers, Jiménez said adding that in the operational part companies are seeing how electric cars are more efficient.

“In Mexico, we are seeing that the electric vehicle is increasingly accessible, the cost of batteries, the most expensive part of an electric vehicle, is declining, and we are starting to see parity between the TCO of an ICE vehicle and the TCO of an electric vehicle, especially when there is a multi-year lease,” Jiménez said.

Decarbonizing fleets

According to Jiménez, Mexican companies are required to decarbonize their fleets by 2030, contributing to the significant growth of electric cars by double digits.

By the end of this year, Mexico's EV output is expected to double to 212,000 units, with the country set to introduce a third EV model during the first quarter.

Pedro Giraldo, Business Development Manager for Latin America at Geotab, highlighted the growing interest in decarbonizing vehicle fleets. “We saw that the electric car userbase of the Geotab platform doubled last year; the behavior is similar throughout the Latin American region,” he said.

In Latin America, last-mile delivery and logistics, food and beverage companies are taking the fastest steps towards fleet decarbonization, according to Giraldo. 

These companies demonstrate that “there is already a proof of concept that confirms that electrification is viable,” Giraldo added.

Lack of energy infrastructure

The growth of electric vehicles, both in private and fleet usage, could face hurdles without a well-planned and strategically located network of charging points, Patricia Baires, Business Development Manager for Latin America at Blink said.

“90% of those who are migrating to fleets are doing it themselves by placing their charging stations within their facilities,” Baires said.

This represents a lot of complication for companies seeking to migrate to electric fleets. “Our countries are not designed for electromobility, so companies have to make a lot of investments in electrical infrastructure,” she added.

Fleet managers in some Latin American countries face lengthy and complex bureaucratic processes to get permits to install chargers. “That not only increases costs but also lengthens the implementation time,” Baires said.

Infrastructure to recharge

While certain Latin American countries such as Mexico and Brazil are making notable strides in electromobility, Guillaume Pin, Procurement Manager Fleet at Ecolab, highlights that the transition to electric fleets in the region lags behind that of Europe.

Pin sees electric cars as particularly well-suited for regions like Latin America, where employees typically have short commutes. He contrasts Latin America with Europe, noting that Europe's older buildings present challenges for installing home chargers, unlike regions with more recent construction like Latin America.

Furthermore, Pin underscores the disparity in commuting habits between Europe and Latin America. In Europe, it's more common for employees to rely on public transportation, whereas in Latin America, where public transportation infrastructure is less developed, the car holds greater importance.

Latin America will be able to accelerate its transition to electromobility once it implements robust public policies, develops well-established electrical infrastructure, and increases the availability of charging stations, but also, after fleet managers adopt electrification strategies to ensure a smooth and rapid shift from ICE vehicles to EVs.

Shutterstock ID: 2350588469 

Authored by: Rodrigo Alonso