How developing countries can benefit from an e-mobility revolution

Riccardo Puliti

Vice President for Infrastructure, World Bank

Electrification of transport is one of the most talked about instruments to set the world on a net zero carbon trajectory.

An e-mobility revolution can’t come soon enough for growing cities around the world, where health complications from poor air quality contribute to nearly 8 million years of life lost annually.

Long-term investment

Electric vehicles are an obvious way to reduce emissions from transport. But they can also bring other benefits, like providing first or last-mile connectivity in remote places, providing alternatives to fossil fuels in transport and even democratising the manufacturing of vehicles. Although, the cost is a major hurdle to adoption. Electric vehicles are expensive — sometimes 70% more than their conventional counterparts. As a result, their sales have remained concentrated in major markets such as China, Europe and the US.

But the math behind electric vehicles is changing, making them more relevant to developing countries. A new World Bank report makes a strong economic case for accelerated e-mobility adoption in many developing countries. The analysis shows that the savings in fuel and maintenance over the life of EVs often offset the higher purchase price. When the environmental and health benefits resulting from a switch to EVs are monetised, the scales tip even further in favor of e-mobility adoption in many places.

Governments need to invest in robust charging infrastructure, which can be up to six times more effective at encouraging EV purchases than subsidies.

Mobility options

For many countries, the first step toward advancing electric mobility will be introducing electric buses and electric two or three-wheeled vehicles. Electric buses carry many people over long distances, so their cost savings accumulate over time. Two and three-wheeled vehicles have a relatively low cost and are already popular in countries such as Cambodia, India, Nepal and Vietnam, accounting for as much as 60 to 80% of all passenger-kilometers. This makes their electrification particularly promising.

Once a country decides that advancing the adoption of electric mobility makes sense, there are several ways governments can be proactive. Non-monetary incentives such as promoting leasing and consumer financing are promising and cost-effective. Most importantly, governments need to invest in robust charging infrastructure, which can be up to six times more effective at encouraging EV purchases than subsidies.

Accelerating progress toward sustainable mobility in developing countries is crucial, and electric vehicles will be an important part of this equation.