Electric cars: can they be assembled in Colombia as Petro proposes? – Sectors – Economy

“We want brands that want to import electric vehicles to Colombia to use national parts and boost electric vehicle production”. With this message on Twitter on February 17, President Gustavo Petro uncovered his government’s letters regarding the future of the automotive industry.

In turn, the Minister of Commerce, Germán Umaña, explained that this initiative is part of the reindustrialization policy that has five axes. One of these is energy transformation, which seeks to attract investment for the production or assembly of electric vehicles with the incorporation of national parts.

“It is time for change. It is possible to industrialize Colombia around clean energy”, Petro said hours later in another message on Twitter. Is this possible?

Petro has a favor that is convinced of the energy transition, it has become a leader in the region in defense of the environment and the fight against climate change; However, reality shows that the big brands in the automotive industry already have planes for the future and Colombia does not appear in these at the moment.

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Our country ranked third in Latin America last year, after Brazil and Mexico, with higher sales of electric cars, but it is one thing that there is an appetite for ‘green’ cars here, and another that it is satisfied with local production.
And that is where the difficulties for Petro’s proposal begin. The local market is too small to think that it is an industrial base of this caliber. Colombia is very far from its neighbors. Argentina sold 537,000 new cars last year; Brazil, 2,105,000; and Mexico, 1,095,000. Colombia barely reached 263,000 units.

For this reason, affirms José Clopatofsky, director of Engine“It does not sound profitable for local manufacturers to assemble and support a line of electric cars, taking into account that they will already be manufactured in neighboring countries, and they do so after the brands have studied all possible possibilities in which Colombia is not present, not only because of the size of the local clientele but also because of the very primary manufacturing of local auto parts, which are of basic technology”.

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Now, he adds, “bringing components to assemble electric cars in the country implies a cost and hardly a justifiable investment when they have very large and capable production chains in Mexico, Brazil and Argentina, protected by FTAs ​​and world trade agreements that Colombia has subscribers, from which they can supply the Colombian market as they are already doing”.

Another of the drawbacks that Clopatofsky raises is that “electrical technology is very expensive, exclusive and dependent on large research and development centers of each brand”, and he maintains that two aspects must be taken into account: “Making cars from scratch is a thing discarded in Colombia for its small market. And exporting to the neighborhoods is very limited since they are already supplied from other countries.. That is why we only assemble with the majority of imported parts. Doing it with the electrical aggregate is very complex and this world is not open or known by auto parts manufacturers at the moment. It is one thing to make shock absorbers, and another, lithium battery cells, for example, with all that this implies in materials such as lithium, cobalt and others that do not exist here”.

Director of Engine He sees a possibility through which the President’s idea could materialize: “The viable idea would be a large component plant, as long as the inputs are brought at competitive prices and it makes thousands and thousands of components to supply factories abroad and that they send us cars armed with those elements from there.”

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“There are other barriers to study and that is that these components are not generic but very specific for each brand. and, therefore, an industry for the export of components could only serve some foreign factories and the open import that today exists in the trade would be limited”.

In addition, he assures that “a great enemy of these projects is economic and legal instability, the very high prices of internal transport of inputs and parts, the high labor costs with respect to alternate countries in the region, the depreciation of the currency, etc. ”.

It is a very ambitious and interesting idea, but it would be very difficult to make it viable when the operation of the industry in a world that is already on other paths is known and well analysed, which responds to decisions planned in the very long term and are quite at stake”, he concludes. Jose Clopatofsky.

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