Vehicles for Passenger TransPorTaTion

The total investment needs associated with the 30×30 scenario amount to US$352 million per year by 2030 (or 0.45 percent of Uruguayan gross domestic product). About four-fifths of the required outlay is associated with the incremental capital cost of private electric vehicles (figure A.18.2a). In terms of public investment, the most significant item is the provision of public charging infrastructure for private vehicles (figure A.18.2a). Given that implicit carbon prices associated with electric buses in Uruguay are quite negative (table A.18.3), there is significant scope to cover almost 80 percent of the incremental capital cost of bus procurement through carbon financing arrangements (figure A.18.2b). However, for four-wheel electric vehicles, the implicit carbon price exceeds US$260 per ton.

The overall economic case for electric mobility in Uruguay is negative in economic terms, although—because of government incentives—strongly positive in financial terms. This outcome is further accentuated under more conservative assumptions about the cost of batteries (“scarce minerals” scenario) and the fuel efficiency of internal combustion engines (“fuel efficiency” scenario), and there is not much scope for further decarbonization of the power sector (“green grid” scenario) (table A.18.2). On a positive note, the significant advantage associated with electrification of buses can be further increased through the more efficient procurement and operation of vehicles (“efficient bus” scenario). However, even when it comes to taxi fleets and other intensively used vehicles, the case for electric four-wheelers remains marginal (“taxi fleet” scenario). It is clear that electric mobility in Uruguay needs to prioritize the bus segment of the fleet, in view of the many advantages offered.

Figures and tables start on the next page.

Figures and Tables

FIGURE A.18.1 Advantage of EV adoption in Uruguay, by type of vehicle

a. Cost advantage: Typology benchmarking b. Cost advantage: Vehicle type

UruguayMixed fleetNet oil importer High-cost vehicles

Source: World Bank.

Note: Data in this figure represent the “business as usual” (BAU) scenario minus the 30×30 scenario (averages over fleet additions). The BAU scenario assumes that no policy target will be imposed for electric vehicles and that vehicle purchase decisions will continue to reflect historical trends. The 30×30 scenario assumes that sales of electric cars and buses will reach 30 percent, and of two- and three-wheelers, 70 percent, by 2030. 2W = two-wheeler; 4W = four-wheeler; CO2 = carbon dioxide; EV = electric vehicle; NOx = nitrogen oxides; PM10 = particulate matter less than 10 microns in diameter; SOx = sulfur oxides.

TABLE A.18.1 Cost advantage of accelerated EV adoption in Uruguay, 2030

Note: Heading colors: blue = excluding taxes and subsidies, gray = fiscal wedge, green = including taxes and subsidies. 2W = two-wheeler; 4W = four-wheeler; “Local externalities” comprises local (NOx, PM10, SOx) air pollution costs. “Global externalities” comprises global (CO2) air pollution costs. CO2 = carbon dioxide; NOx = nitrogen oxides; PM10 = particulate matter less than 10 microns in diameter; SOx = sulfur oxides. Red and parentheses indicate negative value.