Why this country is against providing costly incentives for EV manufacturing

Peru's government on Thursday said a bill in Congress to boost the domestic electric vehicle (EV) industry was too expensive and unnecessary. The bill, currently up for debate in Peru's right-wing opposition-dominated Congress, would provide incentives for investments in the South American country's nascent EV market.

In a statement, Peru's economy ministry said tax exemptions in the legislation would have a cost of approximately 20 billion soles ($5.5 billion) between 2023 and 2032.

The proposal "is excessively expensive considering that global producers already plan to migrate their production to electric vehicles in a period of 5 to 10 years," the ministry said.

Tax exemptions in the legislation cover various types of four-wheel EVs, "including luxury cars and golf carts," the statement added. "The proposal is regressive and ineffective because it mainly benefits a segment of the population that does not need state assistance and will not contribute to reducing the impact of environmental pollution or vehicular congestion."

In 2018, Peru took a first step to promote electric transportation by reducing the import tax on electric vehicles to zero.