Economic analysis of incentives in the electric cars deployment in Latin American

Abstract

World countries societies are concerned with environment protection, seeking the best alternatives to mitigate externalities that affect it, such as fossil fuels use. The second sector after of the industry responsible for emitting greenhouse gases is transport. The United States, Norway, Sweden, China, and other countries are in a process of Electric Vehicles migration although still very slow but in the future will be massive. One of the barriers that does not allow to accelerate its deployment is its high initial cost and the lack of load infrastructure. Considering Electric Vehicle deployment in Latin American is still incipient, there is a need to look for alternatives to boost its deployment.The present study simulates strategies based on assumptions in the application of incentives and taxes that allows to evaluate price of an Electric Vehicle. The results indicate that the best conditions are given to the extent that governments make effort to incentivize through of tax reductions according to the tax structure in each country, such as importation, equity, sales and those that are selective. It is important to have a contribution through subsidies or other benefits that come from the possession the vehicle to replace. Finally, this study considers also those benefit originated by its use during a period of 8 years.