Asset Companies for Electric Vehicles Tender, Brazil - 72106995

Procurement Summary

Country : Brazil

Summary : Asset Companies for Electric Vehicles

Deadline : 04 Oct 2022

Other Information

Notice Type : Tender

TOT Ref.No.: 72106995

Document Ref. No. : 1282825

Financier : World Bank (WB)

Purchaser Ownership : Public

Tender Value : Refer Document

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Tender Details

Expression of Interest are invited for Asset Companies for Electric Vehicles.

Publication Date: 22-Sep-2022

Expression of Interest Deadline: 04-Oct-2022

Assignment Description

The battery Electric Vehicle (EV) market includes a host of battery powered automobiles ranging from passenger cars, buses, 2-wheelers, 3-wheelers and light, medium and heavy commercial vehicles. EV adoption is growing rapidly with approximately 5.6 million units sold in 2021, up from 3.1 million units in 2020 . 93% of global EV production and 97% of global EV sales are concentrated in China, Europe, Japan and the United States. There will be at least twice as many vehicles on the road by 2050 compared to the current fleet, with more than 90% of growth expected to take place in emerging markets.
The transition to EVs creates new challenges for those who wish to own and use EVs, especially for commercial fleet operations (e.g. public transport, logistics, etc.). Key challenges include: i) higher capital requirements due to the higher initial purchase price of EVs relative to equivalent Internal Combustion Engine (ICE) vehicles, and the cost of the additional charging infrastructure required (up to $180 billion needs to be invested by 2030 to meet global demand for EV charging stations ); ii) difficulties for operators in selecting appropriate EVs and associated infrastructure for their operations, due to technology that has not been tested in real-world operations at scale; iii) concerns around operational feasibility (higher risk of operational inefficiencies caused by payload capacity variance, longer charging times and a lack of EV specific service network) and iv) concerns around unknown residual value of used EVs and underdeveloped resale markets.

The current set of stakeholders in ICE-based fleet operations include the equipment manufacturer (OEM), the fleet owner / operator, and the financier. Traditionally, OEMs have only been interested in selling the vehicle and providing after-sales service, not in capitalizing the vehicles and leasing it themselves. The fleet operator focuses on managing day-to-day operations and in many instances, would not prefer to be burdened with technology selection and residual value risks of EVs. Financiers are concerned with the long-term durability of the EVs, and their ability to assess the loss-given-default is diminished due to unknown resale data and nascent resale markets. Thus, new EV asset-related competencies are needed, importantly:
Asset selection: Choosing the right specifications of EVs, batteries and charging infrastructure for a given fleet operating pattern and operating environment;
Asset lifecycle management: OEM partnerships for warranties, service support, assessment of residual value and ability to take on the resale risk; and
EVs asset operations capability: ability to setup, plan and operate EVs and associated infrastructure to ensure operations are not disturbed

EV AssetCos are one of the solutions being increasingly explored by the private sector as a potential solution to financing and managing EV assets (EVs and/or charging infrastructure) at scale. In theory, these entities can bring the required EV asset selection, purchase and management expertise to provide mobility-as-a-service to fleet operators, thereby minimizing exposure to technology risks for operators and financiers. They help to accelerate EV adoption by aggregating EV demand, ensuring efficient operations, and creating partnerships for resale/disposal of used EVs and batteries. Given that AssetCos are asset-heavy by nature, they will require access to large amounts of capital and as such could represent significant investment opportunity

Documents

 Tender Notice