IEEE Electrification - June 2019 - 30

xx
typical yearly driving distance: allows quantification of

ation and maintenance costs (paid every year of vehicle possession).

yearly energy consumption
xx
estimated energy price forecast: a highly uncertain variable that allows quantification of the cost of driving
the vehicle per year
xx
estimated maintenance cost over the TCO horizon: consists of all costs needed to ensure that the vehicle can
operate (e.g., repairs, replacement of parts, oil changes,
and so on).
The TCO methodology then follows the next steps:
xx
energy consumption: quantifies the yearly energy consumption using vehicle performance and typical yearly driving distance
xx
energy cost: estimates the total energy cost (i.e., operation cost) in US$ for each year of the TCO horizon
by multiplying the energy consumption and the
price forecast
xx
NPV of total expenditures: determines the NPV of each
cost over the years. The costs considered here are
up-front costs (paid at once in the first year) and oper-

What Are the TCO Numbers in Latin America?

Uruguay

Peru

Paraguay

*Nicaragua

Mexico

Panama

Mexico

*Honduras

Honduras

Guatemala

El Salvador

Ecuador

Costa Rica

Chile

Colombia

Brazil

Bolivia

I E E E E l e c t r i f i cati o n M agaz ine / J UN E 2019

Uruguay

Peru

Paraguay

Panama

Nicaragua

Guatemala

El Salvador

Ecuador

Chile

Brazil

Bolivia

Argentina

TCO (×US$1,000)

Argentina

Gasoline Price (US$/liter)

Residential Electricity Rate at 500 kWh
Consumption (US$ cent/kWh)

Figure 6 shows the up-front costs per country gathered in
early 2019. (The retail price may be affected by tax exemptions, which are not considered here.) The cost of EVs (e.g., a
Leaf and Ioniq) is always higher than that of IC vehicles
(e.g., a Corolla, Sentra, or Elantra), on average by 187%. The
analysis uses average values when data are not available
(see Figure 5). This analysis excludes Venezuela due to
uncertain data.
Figure 7 then shows the current electricity rates (as of
June 2018) and gasoline prices (as of January 2019) in each
Latin American country. In terms of the forecast for gasoline prices, we use the trend provided by the New Policies
scenario presented at the World Energy Outlook 2018 of
the IEA. The electricity cost forecast follows the trend provided in the Annual Energy Outlook 2018 of the U.S. Energy
Information Administration.
Based on consultations with
vehicle manufacturers, we assume
an average maintenance cost of
US$1,200/year for an IC vehicle.
1.8
25
Although this value is lower during
Avg.:US$ cent 14.25
1.6
the first years of use, it increases sigAvg.:US$
1.01
20
1.4
nificantly after 5 years (according to
1.2
consulted garages). An EV has fewer
15
1
moving parts, so it has much lower
0.8
10
maintenance costs: in this case, 30%
0.6
of the costs for an IC vehicle.
0.4
5
Vehicle performance varies per
0.2
car and country, but we use an EV per0
0
formance of 5.33 km/kWh and an IC
vehicle performance of 13.85 km/L,
similar to that of a large sedan.
Based on typical values from the
*For countries without available data, the average value was used.
economic literature, we use a discount rate of 5%.
Figure 7. The electricity rates in Latin American countries at the end of 2018. Avg.: average.
Figure 8 presents the TCO results,
considering a TCO horizon of 6 years
(i.e., by 2025) and a yearly driving dis70
tance of approximately 12,500 mi
EV
IC Vehicle
60
(~20,000 km), the average value in
50
Costa Rica and assumed for all other
40
countries. For these inputs, Figure 7
highlights that EVs are more cost
30
effective only in Costa Rica. It also
20
shows that Honduras, Panama, Para10
guay, and Uruguay have a TCO dif0
ference lower than US$5,000, which
implies that EVs can become as cost
effective in the short term in these
Latin American countries. In addition, these results highlight the fact
Figure 8. The results of the TCO assessment for a six-year TCO horizon and a yearly driving
distance of 20,000 km.
that countries with lower up-front

IEEE Electrification - June 2019

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