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A break-even analysis for battery electric trucks in Latin America

Tanco, Martín, Cat, Luis, Garat, Santiago
Journal of cleaner production 2019 v.228 pp. 1354-1367
batteries, carbon dioxide, electricity, electricity costs, freight, fuels, greenhouse gas emissions, imports, infrastructure, insurance, linear models, ownership, prices, public policy, subsidies, tariffs, trucks, Argentina, Brazil, Chile, Colombia, Latin America, Uruguay
The transport sector stands in the core of Latin-American economies but is also responsible for 19% of CO2 emissions in the continent. Battery electric trucks (BET) are a modern alternative to diesel trucks with the potential to mitigate the freight transport emissions of CO2. This study makes an economic analysis, in a total cost of ownership (TCO) basis, for different weight classes and applications in five Latin-American countries: Argentina, Brazil, Chile, Colombia and Uruguay. Based on data gathered by a state-of-the-art literature review, the aim of this paper is to calculate the break-even year for each segment's BET by means of a quantitative linear model. This model considers multiple parameters that vary between the different countries, such as purchase price, fuel and electricity costs, insurance and registration costs, maintenance costs, import tariffs and charging infrastructure costs. Results show that Chile and Uruguay are the first countries to achieve break-even while Argentina and Brazil the last. A lower mileage leads the transition together with light-duty trucks, whereas heavy-duty trucks fight to reach parity with diesel trucks. Initial investments on BETs are highlighted as the main barrier for their adoption since it is the main cause for the TCO gap between both alternatives, while the electricity and fuel cost differential is also identified as a relevant factor to achieve parity. Public policies such as tax exemptions and subsidies are analysed by studying their impacts in achieving an earlier break-even. Finally, this research provides insight into a currently deserted venue as it is the insertion of BETs in Latin America.