World Bank Boosting EV Uptake in Developing Markets

World Bank backs EV uptake in developing markets, considering dominant transportation modes despite lower adoption rates

Electric vehicle (EV) adoption is gaining momentum in developing markets like Southeast Asia and Brazil. Despite infrastructure challenges and strains on electricity grids, the transition to electric vehicles is underway, offering a promising solution to reduce emissions and enhance sustainable mobility.

Modes of Transport

In many emerging markets, shared vans, minibuses, and two and three-wheelers (2/3Ws) are prevalent passenger transport modes, often electrified for accessibility and affordability. However, transitioning from traditional internal combustion engines (ICE) to EVs presents financial challenges, with EVs typically being more costly than ICE vehicles. Bridging this capital cost differential is essential to ensure the long-term viability of electric mobility, especially in public transport, where the adoption of EVs can significantly reduce emissions.

The World Bank is leading the effort to support countries in their transition to electric mobility, emphasising the urgency of lowering carbon emissions from transportation. Through investments in infrastructure, technical assistance, and private sector engagement, the World Bank aims to improve the scalability and bankability of electric mobility solutions, particularly in public transport and e-buses.

View of EV developing market expansion

India has seen a remarkable 70% year-on-year increase in electric car registrations, driven by government incentives and the introduction of popular new models. Thailand's electric car registrations quadrupled with the help of subsidies and investments from Chinese manufacturers. Similarly, Vietnam has experienced unprecedented growth in electric car sales, with domestic manufacturer VinFast leading the way.

Tax breaks and infrastructure investments in Malaysia have boosted electric car registrations, attracting global brands like Mercedes-Benz, BYD, and Tesla. Latin American countries such as Brazil, Colombia, Costa Rica, and Mexico are likewise witnessing a surge in electric car sales, supported by local incentives and infrastructure development. Brazil, in particular, is poised for significant growth in EV adoption, with initiatives like the Green Mobility and Innovation Programme incentivising low-emission vehicle development.

Mexico's strategic position and favourable trade agreements make it a key market for electric car manufacturing, attracting investments from major global automakers. While electric cars remain rare in Africa, Eurasia, and the Middle East, partnerships and investments from Chinese carmakers are expected to drive sales in these regions.

The World Bank's efforts to accelerate electric mobility adoption in emerging markets reflect a growing global momentum towards cleaner and more sustainable transportation options. By addressing challenges and promoting investment in EV infrastructure and technology, these markets can pave the way for a greener future.

Electric vehicle sales are rising in emerging markets despite starting from a modest base. Apart from infrastructure challenges, the transition to electric vehicles' existing issues may further strain already overwhelmed electricity grids. 

According to the World Bank, a practical approach to decarbonise the transport sector is the widespread adoption of electric mobility, particularly in public transport. However, EVs are significantly costlier than traditional internal combustion engines (ICE). The World Bank estimates that in some developing countries, electric buses can be nearly 60% more expensive than their ICE counterparts. 

To meet the increasing demand for passenger transport while reducing the sector's emissions, policymakers and planners must find ways to bridge the capital cost differential associated with electric vehicles and ensure the long-term financial viability of electric mobility.

Cecilia M. Briceno-Garmendia, Lead Economist for the World Bank's Transport Global Practice

Cecilia M. Briceno-Garmendia, Lead Economist for the World Bank's Transport Global Practice, emphasises the urgency of lowering carbon emissions from transportation. She highlights that the transition to e-mobility is no longer a matter of "if" but rather "how" and "when" for developing countries.

The World Bank supports countries to improve the scalability and bankability of electric mobility solutions, with a particular emphasis on public transport and e-buses. It employs a comprehensive approach, combining investments in infrastructure, technical assistance, and active engagement with the private sector so that these different activities bolster and reinforce one another to maximise impact.

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