Bolivia’s fuel shortages and 'junk gasoline' drive a surge in electric cars

LA PAZ, Bolivia (AP) — Tired of gasoline shortages and skyrocketing prices, Simón Huanca took matters into his own hands.

The 53-year-old Indigenous artisan imported a Chinese electric car to navigate El Alto, Bolivia’s highest city, using the vehicle to transport both his family and the alpaca wool for his weaving workshop.

He also installed a dedicated charger in his own garage, mainly for convenience, but also because there are only three public charging stations serving the vast metropolitan area of El Alto and neighboring La Paz, home to more than 1.6 million people.

“Since last year, I’ve been trying to get an electric car to save on costs,” Huanca said while driving his electric off-road vehicle through a working-class neighborhood.

Huanca is one of a small but growing number of Bolivians abandoning their fossil fuel-powered cars for electric vehicles as the South American country grapples with fuel shortages and a presidential decree that ended long-standing fuel subsidies, effectively doubling the cost of gasoline.

‘Junk gasoline' and the Iran war

Bolivia's energy supply disruptions worsened in 2023 under then President Luis Arce, who maintained a state subsidy under which the country purchased fuel at international prices and sold it at half its value on the domestic market.

But Bolivia — which imports 80% of the diesel and 55% of the gasoline it consumes — gradually ran out of foreign currency to purchase fuel, and the subsidy represented an annual drain of more than $2 billion on the state.

Long lines of vehicles waiting at gas stations became a common sight.

In December — one month after taking office — President Rodrigo Paz repealed the subsidy, and energy prices nearly doubled, hitting Bolivians hard.

A few weeks later, transport operators complained that the poor quality of the gasoline was damaging their vehicles. The government alleged sabotage, and Paz said that the gasoline distributed by state-owned oil company Yacimientos Petrolíferos Fiscales Bolivianos was contaminated with gum and manganese that had remained in the storage tanks since the Arce administration.

The “junk gasoline” scandal triggered a wave of strikes and protests among transportation workers and the resignations of two high-ranking officials at the state-owned oil company.

The last straw for many Bolivians was the Iran war. Faced with the possibility of yet another rise in fuel prices, some traded in their gasoline-powered cars for electric vehicles.

“The investment exceeds $36,000, but I no longer waste valuable working hours searching for fuel or managing vehicle repairs,” said Ever Vera, a 54-year-old lawyer.

Electric cars expected to gain broader appeal

The number of electric vehicles in Bolivia climbed from 500 to 3,352 in the last five years, according to the Single Registry for Tax Administration, which compiles data on tax-paying vehicles. The most significant surge was recorded over the last two years, coinciding with the fuel crisis. They still only make up a tiny fraction of the estimated 2.6 million vehicles in the country of almost 12 million people.

The vast majority of these vehicles were imported from China, followed by the United States.

“The growth is exponential,” said Freddy Koch, an electromobility expert with the independent nonprofit organization Swisscontact. He noted that while these vehicles are being purchased by more affluent buyers, he expects them to gain broader appeal and predicts that the total number of electric vehicles could triple in as little as two to three years.

Paz also eliminated import tariffs on all types of automobiles, a move that has multiplied the number of importers competing with one another to bring these vehicles into Bolivia at a lower cost.

The rising number of electric vehicles has created new opportunities for 38-year-old electrician Marcelo Laura. A month ago, he identified a lucrative niche in the installation of residential and commercial charging stations.

“There aren’t many public charging stations,” he said. “A year ago, I thought it was practically impossible to think that people would actually be bringing in electric cars.”

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