energy transition

Electric cars, Latin America, and the Great Power Competition

In 2024, it became clear that the West had lost the competition in electromobility to the East. American flagship companies such as Ford or GM are lagging in producing electric cars (EVs). Tesla, which until 2022 was the leading supplier of pure EVs, has been overtaken by Chinese manufacturer BYD since 2023 while facing difficulties in its sales, profit margins and supply chain intertwined with Asia. On the other side of the Atlantic, Germany's Volkswagen also showed that it could not compete with Asian companies by announcing the closure of two factories in its territory (an unprecedented move), which Chinese companies could take over. In Asia, Japanese companies can compete, especially Toyota, which leads in the production of hybrid EVs. Nissan and Honda announced plans to merge, in December 2024, and take on the Red Dragon cars. Although the deal with Nissan did not go through, the company is continuing with its restructuring plans. In this article, we will review what this means for Latin America as it transitions towards electromobility in the context of the trade war launched by Washington.

Autor:

José Carlos Díaz Silva

OBELA

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electric vehicles

energy transition

great power competition

Trade war

China and investment in electrification in Latin America

The shift in the energy matrix, driven by growing concern about climate change and the search for cleaner, renewable energy sources, has opened up a range of opportunities for investors. China's growing influence in Latin America has significantly reshaped the regional energy landscape. The main Latinamerican countries have made progress towards renewable energies, but the change in the energy matrix is still a long way off. This article will review the participation of the Red Dragon in Latin America in the electricity sector on the renewable energy side.

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The search for Latin American lithium

The energy transition has made lithium a critical element. In Latin America it is a priority issue that gained strength since the beginning of the second decade of the 21st century. The energy transition has forced the use of technology and inputs other than those related to hydrocarbons.

Lithium has gained an important place in the dispute for world hegemony. Since lithium was recognized as a key element for the energy transition of the vehicle fleet, it began to be considered as a strategic material.

Latin America stands out for its immense lithium reserves. Bolivia, Argentina and Chile are the three countries with the largest reserves of this material. Lithium and its exploitation in the region is a clash of interests. While the countries of the region themselves seek to take advantage of the growing demand for lithium to obtain fiscal resources from its exploitation, developed countries ensure access to it for the production of rechargeable batteries.

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Oil companies and clean energy

The economic crisis, the collapse of oil prices and the change in the energy matrix pose a danger to the oil industry. Low profitability is putting pressure on the big oil companies to change their energy production, and the environmental cost of the sector is gigantic.

The large global oil companies have begun to look at clean energy as a business alternative, as well as to recognize the need to seek new ways of profitability and to maintain the environment.

However, the evidence that the oil industry's efforts to enter green energy are not enough. The disproportion is still great if one compares the total investment with that invested in clean energy, which is greater than 20%.

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