How to accelerate electric car adoption in Chile

Boosting the pace of public charging infrastructure development and offering price incentives would help spur adoption of fully electric cars in Chile, Chinese brand MG Motor told BNamericas.

The country is racing along the electric bus highway and in terms of passenger vehicles, new units sold from 2035 must be zero-emission. 

Héctor Illanes, local deputy director of sales for manufacturer SAIC Motor – whose stable of brands includes MG Motor – outlined what constitutes speed bumps on the adoption highway.

“In our point of view, there are various,” Illanes said. “The availability of public charging points is limited, which could generate concerns about [vehicle] autonomy, convenience.”

He added: “Obviously it would be great to advance faster in this sense because it is a big problem today.”

The country has an electromobility roadmap in place and the government is working with manufacturers, via Chile's motor trade chamber Anac, on infrastructure development plans. The energy ministry also recently introduced secondary legislation on electric vehicle charging point interoperability and standards. 

Given interregional travel is common in Chile, a target is building out rapid-charge infrastructure on highways. 

Price also constitutes a headwind to increased adoption. 

While a scaling up in global battery production over the coming years will place downward pressure on battery prices – which constitute around 50% of an electric vehicle price tag – to help incentivize people to switch to electric, Chile should emulate the likes of Europe by offering financial incentives, Illanes said.

“It is very important that this [battery cost reduction] happens and obviously, in parallel, greater [financial] injections or [tax/duty] exemptions on the part of the government,” Illanes said.

The government’s energy storage and electromobility law dangles a road tax reduction carrot and opens the door for electric vehicles to operate as distributed energy storage assets that draw from and inject into the grid.

A trailblazing industry survey produced by Swedish carmarker Volvo and Chilean consultancy Almabrands found that along with addressing the issue of price and autonomy concerns, educating consumers was vital, citing a correlation between awareness and willingness to purchase. 

The average price of conventional vehicles in Chile is around 23.6mn pesos (around US$27,000), compared with 59mn pesos for electric models. The cheapest fully electric models are priced around 30mn pesos.

MG Motor has already sold more than 150 units this year, making it the No. 2 player in the fully electric car segment in Chile. The company offers two fully electric SUVs and is preparing to add a hatchback model to its stable next quarter, amid a trend of smaller electric vehicles coming onto the market as battery technology matures.

Anac forecasts that dealers will sell 1,500 fully electric vehicles this year, up 16% on the 2022 tally. Sales are forecast to accelerate in 2024, when 3,900 units are expected to drive off dealer forecourts, “which is very significant growth,” Illanes said. For 2025, more than 8,000 units are forecast to be sold.

Anac has previously announced a 2025 goal of hitting the 5% penetration mark, up from a projected 1.3% in 2024. Globally, penetration could reach 18% this year, up from 14% in 2022, according to International Energy Agency estimates.

In 2019, MG – which buys batteries for its cars from a provider in China – launched the first fully electric SUV in Chile.