Electric cars are capturing headlines and wallets the world over. Over 6 million were sold in 2021, double the year prior. With some government policies shifting in their favour, these cars may become the new normal in major global markets. Can the same be said for developing countries?
To date, the high prices of electric vehicles (EVs) have constrained the bulk of sales to places like China, Europe and the United States. In these markets, EVs are becoming solidified as a tangible way forward-thinking consumers and governments can incorporate climate action into their everyday lives. This is important, because the transport sector is already responsible for 20% of GHG emissions globally. This percentage is rapidly increasing, especially because of developing countries.
As cities in developing countries grow, so does the demand for mobility. Without a clear strategy for sustainable transport that is accessible, safe and affordable, the world runs the risk of putting many more combustion engines on the road than the climate can handle. What can be done?
Until now, critics have had well-founded counterarguments against the application of EVs in developing countries. The price? Too high. The technology? Too complicated. Charging capabilities? Too limited. But new research from the World Bank suggests it’s time for a closer look.
Our new analysis of 20 developing countries demonstrated a strong – and likely to improve – economic case for accelerated EV adoption in many countries. For some categories of vehicles – especially electric buses, electric two-wheeled vehicles and electric three-wheeled vehicles, the savings in fuel costs and maintenance costs offset a higher initial purchase price. When the additional environmental and health benefits of reducing transport emissions are monetized, the scales tip even further in favour of incorporating more EVs in developing-country transport systems.
The catch? This math applies primarily to electric buses and electric two- and three-wheeled vehicles. Buses cover long distances with high occupancy and centralize charging infrastructure, making them an attractive option for governments who are grappling with improving basic public transport and decarbonization. Electric two- and three- wheeled vehicles have many interesting applications, ranging from last-mile connectivity in places where public transit can’t reach, last-mile delivery of goods, and personal transport. These electric scooters, bikes and trikes are already comparable in price to their gas-powered counterparts, are easier for consumers to maintain, and they build on practices and habits that are already well-established in many places.
Electric vehicles could have a particularly important impact outside the developed world. Image: World Bank
There is a lot to be gained from incorporating more e-mobility solutions into modern transport systems in developing countries. This is especially true when EVs are paired with more comprehensive strategies for sustainable mobility, which include efforts to promote well-planned cities, improved mass transit and more practical active mobility. While electric vehicles don’t solve all transport problems – such as road crashes or congestion – their implementation does align with larger development goals. Using electric bikes and scooters can be a cost-effective way for people in remote areas to gain mobility and get connected with opportunities and critical services. Shifting more traditional transport modes to electric alternatives can improve local air quality. And, EV adoption can add a layer of energy security to countries where gas and oil prices are volatile and hit customers hard.
The World Bank is also currently working with the government of India to support their efforts to purchase 50,000 electric buses over the next decade. And in Bogota, Colombia, we explored the use of electric cargo bikes for last-mile delivery. The six-month pilot project, called Bici Carga, generated encouraging results, with positive customer satisfaction and increased efficiency in terms of deliveries.
These projects build on successes already being observed in places like Santiago de Chile, which has already invested in 800 electric buses, with another 1,000 on the way in the next six to seven months. Chile views e-buses as an integral component to its plans to becoming fully carbon-neutral by 2050.