Vehicle electrification seen up more than five-fold in Latin America
Annual electrified car and light commercial vehicle (LCV) sales in Latin America is expected to jump to some 158,300 units by 2025, according to the results of a study by international consultancy firm Frost & Sullivan published in 1Q20.
According to the 2018-2025 study, while sales of hybrid electric vehicles (HEV) in 2025 should be nearly five times more than 2018, sales of battery electric vehicles (BEV) and plug-in HEVs (PHEVs) should jump more than 11-fold. Brazil and Mexico is seen representing more than 75% of the market, a scenario similar to that of today.
Considering the current situation, Mexico is ideal for implementing an electrified “green” fleet today, according to Polo Palmen who is Procurement Manager in the Americas for international food and beverage company Nestlé.
Nearly 90% of our company cars in Mexico are hybrid electric vehicles (HEV) and they make up about 30% of our entire fleet in the Americas, Mr. Palmen told Fleet LatAm.
Although we are still looking at possible options, electrification does not look like the most efficient choice in Brazil right now and this is due to the lack of charging infrastructure and the relatively high residuals on gasoline cars. All of this has an impact on costs, said the executive.
The infrastructure scenario, however, is seen improving in the coming months with several initiatives aimed at increasing the number of recharging facilities in the country, Fleet LatAm reported in March.
Polo Palmen (source: handout)
As for 2025, approximately 114,700 HEVs, 23,300 battery electric vehicles (BEV) and 20,300 plug-in HEVs (PHEVs) are seen selling that year, representing average annual growth rates of approximately 26% for HEVs, 50% for BEVs and 36% for PHEVs from 2018-25, the report said.
By country, the consultancy firm sees approximately 61,700 units being sold in Brazil (2.3% market share if overall sales are similar to 2019) and 61,400 units in Mexico (4.7% market share in the same scenario).
Just like today, Mexico is expected to have some of the strongest demands and lowest price offerings for electrified vehicles in the region. Of the 61,400 units, Frost & Sullivan estimates that 57,200 will be HEVs or PHEVs and 4,200 will be BEVs.
Finally, as for the country’s third largest vehicle market Argentina, approximately 6,700 of these types of vehicles are expected to be sold in 2025 (1.8% market share in the same scenario).
For Manuel Tamayo who heads Mexico operations for international vehicle leasing and fleet management company Element Fleet Management, hybrids are definitely in more demand in Mexico than BEVs right now and this is mostly due to the options available in the market.
“In general, electrification is a hot topic but what is really missing is more product offerings from OEMs,” Mr. Tamayo told Fleet LatAm.
Manuel Tamayo (source: handout)
Note: As the 2025 electric vehicles sales forecasts are being compared with 2019 overall sales, remember that the percentage of EV market share in 2025 could be slightly lower if overall sales that year is higher than in 2019.