The quest to build electric vehicles in Bolivia​

Quantum Motors is trying to bring electric vehicles to Latin America, in the form of tiny electric cars.

Its E series, introduced in 2019, were the first cars of any kind to be made in Bolivia.

Quantum has been heralded as a symbol of Bolivia’s lithium-powered future.

But in a country of big trucks and gas subsidies, will it take off?

But in a country of big trucks and gas subsidies, will it take off?

Tiny cars and massive lithium deposits: The unlikely quest to build electric vehicles in Bolivia

By THOMAS GRAHAM

12 de Abril 22. Cochabamba, Bolivia

On a map, Santa Cruz de la Sierra, Bolivia’s largest city, looks like a dartboard. Ring roads emanate from the center like ripples, while radial roads pierce from the outskirts to the inner layers. It’s a city that was designed for cars — big cars. The main roads are flanked by shining showrooms full of SUVs, alongside farming machinery advertised by men in Stetsons.

José Prado cuts a contrast with his home city. He’s rake thin, blue eyed, and ponytailed — a 45-year-old sound engineer turned guitar teacher. When Rest of World met him in his garden in February 2022, he was barbecuing while half-shouting over a torrential summer storm. In a city like this, Prado said, “the bigger your truck, the bigger your status.” He set a chunk of steak and a string of chorizos sizzling. “Aspiring to have the tiniest car possible is a little contradictory.”

Yet that’s what Prado did a year ago: he bought a tiny electric vehicle (EV). Parked in his driveway, it is white, blocky, and almost cartoonishly small. It seats one person in front and two — at a squeeze — in the back. According to its specs, it tops out at 55 kilometers per hour and has a range of about 55 kilometers per charge. It can be plugged into a wall socket; Prado has previously charged the car using an extension cord snaking out of his child’s bedroom window.

Prado is the proud owner of a Quantum E4, made by the Bolivian company Industrias Quantum Motors. Quantum’s E series, introduced in 2019, featured the first EVs — indeed the first cars of any kind — to be made in Bolivia.

Quantum wants to bring electric mobility to the Latin American masses — people for whom a top-tier EV such as a $45,000 Tesla is out of reach. “Every country, rich or poor, has to move to electric mobility in the coming years,” said José Carlos Márquez, co-founder and CEO of Quantum. China, where a million cheap and tiny EVs were sold in 2021 alone, has shown it can be done. Those cars weren’t manufactured by giants of the EV industry like Tesla or Nio but by thousands of smaller startups with relatively obscure badges like Levdeo, Hebei Yujie, and Byvin. And now Quantum, together with a string of startups across the Global South, from India to Argentina, is taking the concept of supercheap EVs global.

But while China laid the groundwork for these businesses, it may also have been an exceptional case.

Already, the EV sector is starting to see consolidation, a trend that could make it harder for small EV makers to compete. And the business environment and market for tiny EVs is different in different countries. Companies like Quantum will have to carve their own paths to success.

In Bolivia, the politics are turbulent, the startup scene is small, and Quantum’s product is alien to many consumers: a locally assembled EV from a new, homegrown brand. This, in a country where there are only 1,000 or so electric vehicles on the road in total, and where the mark of quality is a Japanese brand. But over in Cochabamba, one of Bolivia’s largest  cities and home to Quantum, the company’s founders believe their tiny cars could start a tiny revolution, both in electric vehicles and Bolivian manufacturing — and make Quantum a force in Latin America’s shift to electromobility.

“If we can make it in Bolivia, in these circumstances,” said Carlos Soruco Deiters, Quantum’s other cofounder, “we can make it anywhere in the world.”

José Prado is the owner of a Quantum E4.

The small EV tops out at 55km/h and has a range of about 55km.

The cars cost around $6,000 a piece and can fit one person comfortably.

They can be charged through a standard wall socket.

The Quantum shop in Cochabamba is immaculate; every surface shines. On the walls are prints of pretty people having a good time with Quantum’s vehicles, like something out of a Coca-Cola ad: in one, a man and woman pose on Quantum motorbikes in front of the Hollywood sign in Los Angeles. On the floor, Quantum’s products are on display: the car, but also motorbikes, electric bicycles, and its electric version of a torito — a load-bearing three-wheeler.

One day this past January, the marketing team was tapping away busily on laptops and smartphones, while Márquez’s voice emanated from somewhere in the shop. He was recording a promotional video for Yadea, the Chinese partner that makes Quantum’s electric motorbikes. “Ni hao, hello, hola.” He paused. “Ni hao, hello, hola.” He repeated the message dozens of times, like some sort of spell, trying to nail the performance.

Márquez strode over, tall and a little awkward in his movements. Now 40, he joined his family’s metalworking business, Metalin, when he was just 18. For decades, Metalin imported and manufactured equipment for the construction and mining industries, and it was a mining tool that would inspire Márquez to launch Quantum.

The tool, known as a Gorila, was a kind of electric wheelbarrow that helped miners cart ore around. The engineers at Metalin played around with the design, making smaller and larger models — some could carry a ton of load. “Then we said: this is practically a car, isn’t it?” Márquez said.

“Our streets are more like those of Bombay or New Delhi than those of California: we don’t have high speeds, we have very slow, disorderly traffic.”

The concept for Quantum began to take shape in Márquez’s mind. The world was shifting toward electric mobility. China had already shown that tiny EVs could flourish. And Bolivia’s cities, like many in Latin America, are choked with cars and pollution. Cochabamba, where he lives, has some of the worst air pollution in the country. At rush hour, a gray haze hangs over the city. It could be a good idea, he thought, to have a car made for Bolivian cities. “Our streets are more like those of Bombay or New Delhi than those of California: we don’t have high speeds; we have very slow, disorderly traffic. Sadly, that’s not going to change, and, at the same time, we need a solution that fits what people can afford — just like with the miners.”

It wouldn’t be a big leap, Márquez figured, to repurpose the facilities the family business already controlled to enter the transportation space. So he imported a few small EV models from China, did some reverse engineering, and began developing his own prototype vehicle.

José Carlos Marquéz, cofounder of Quantum, wanted to make an affordable car that worked well in Bolivia’s congested cities.

In 2017, Márquez brought the embryonic idea for Quantum to Soruco. AT the time, Soruco was working as a lawyer, and Metalin was a client. Both glimpsed an opportunity to make an electric car that would be the cheapest and most environmentally friendly vehicle in Bolivia. “We saw that if we could bring out a car that cost less than $9,000 — which is what a Suzuki Alto, for example, costs — then we could have something of a market,” Márquez told Rest of World.

  

Márquez and Soruco pulled together $500,000 of their own capital and raised almost $1 million from Plastiforte, a Bolivian company that makes HDPE piping, then got to work. They drew on the existing resources and expertise of Metalin, set up a plant alongside the Metalin factory, used employees and machinery to develop the prototype, and set up the first assembly line. Meanwhile, they landed on the name. “We wanted one that sounded intelligent, that had a certain mystique — and if it could have something to do with energy, all the better,” said Márquez. “And, well, ‘Quantum’ fit the bill. It’s a unit of energy — and it’s small.” Quantum became a legal entity in July 2019.

But making a car in Bolivia, even a tiny electric one, is no mean feat. With 11.6 million people and the lowest GDP per capita in South America with the exception of Venezuela, the market is small. Bolivia has no existing car manufacturing industry — in fact, it has little industry of any kind. It tends to export commodities, such as gas, gold, and soy, and import manufactured goods. Those goods often come as contraband, flowing through Bolivia’s vast informal economy, which the International Monetary Fund estimates accounts for 62.3% of its GDP. Right now, almost 85% of Bolivians work outside the formal economy.

In the early months, Márquez and Soruco met a wall of skepticism. Banks resisted the idea of extending credit to potential buyers of Quantum’s EVs. They struggled to find partners to help with financing. Insurers didn’t want to cover Quantum cars either. They sent letters asking for bureaucratic changes to be made that would allow people to register their cars without producing importation documents, but the authorities didn’t respond. “No one believed us,” said Soruco. “They didn’t think it was possible to make cars in Bolivia.”

Still, the company was making a buzz. The company was written up in major Bolivian publications such as Página Siete, El Deber, and La Razón. As an EV company, Quantum was a poster child for government officials who were eager to industrialize Bolivia’s vast lithium deposits — even though Quantum’s car batteries did not use lithium from Bolivia. Former President Evo Morales, then on the campaign trail, dropped by Quantum’s factory to test drive the car. In comments made to Cochabamba newspaper Opinión, Morales said he wanted to buy one himself and exhorted others to do the same: “I want to ask the people to buy and support this proud example of Bolivian industry. We have scientists putting out electric cars in Bolivia — and our job is to bring the lithium.”

Quantum’s showroom in downtown Cochabamba, Bolivia.

Despite the hype — much of it from the government itself — the red tape persisted: when Quantum launched its first car in September 2019, it was still impossible to register the vehicles with the government and get license plates without import docs. In fact, they were illegal to drive. Morales promised to fast-track the bureaucratic changes that would get Quantum’s EVs on the road.

Soruco says the bureaucracy was just one part of a deluge of setbacks. First, there was political upheaval: In October 2019, Bolivia went to the polls. Morales won the election, but with allegations of fraud from the opposition. The country seized up with protests. Eventually the army suggested Morales resign; he did, then fled the country. Morales later claimed it was a U.S.-backed coup to gain control of Bolivia’s lithium.

During those days of unrest, Quantum, which had barely got going, ground to a halt. “The factory — closed. All our shops — closed. Everything blockaded,” said Soruco. They had 50 cars in the factory, some already sold, that couldn’t be delivered.

Just four months later, the pandemic hit. Quantum relied on manufacturers in China to produce components such as batteries, so when supply chains seized up globally, their production did too. “These were critical moments for us,” said Soruco. “José Carlos and I of course took no salary for months, doing everything we could to pay [our employees].”

In between the waves of the pandemic, the blows kept coming. Social conflicts in Chile closed the port that Quantum used to receive components — then a global container shortage sent the cost of shipments soaring. One time, Soruco told Rest of World, they paid $19,000 for a container that would normally have cost them between $1,500 and $2,000. “In the last quarter of 2020, things started to get better,” he said. “But I would say that even now things aren’t normal. The consequences of a battered economy are still with us.”

“The factory’s capacity is 60 cars a month, working one shift, and if we drink a little coffee, we could work two.”

Over the past two and a half years the company has been able to put about 1,400 Quantum EVs on the road, of which 350 are cars and the rest are mostly motorbikes. In an average month, Márquez said, the company sells 15 cars, 30 motorbikes, and 20 bicycles. But if the factory were dedicated to manufacturing cars, it could make many more. “The factory’s capacity is 60 cars a month, working one shift,” he said. “And if we drink a little coffee, we could work two.”

Márquez’s Quantum — gun gray and spattered with mud — was parked outside the shop. He agreed to take Rest of World for a spin. Inside, the absence of sound was striking. The car simply started to move, as if from nothing. The only noise I could hear was a whirring that became gradually higher pitched as the car sped up.

Every other vehicle on the road was higher than us, bigger than us. Whenever we stopped at a traffic light, people eyed us curiously, with the beginning of a smile. Something José Prado had said came to mind: normally, when you get in a car, you become invisible — but with a Quantum, it’s the opposite.

As we did laps around the shop, Márquez said the hardest part about starting Quantum in Bolivia was the lack of precedent. Before they actually made the car, they struggled to convince anyone that they were serious. Now the cars are out there, they still need to overcome the prejudice that Bolivians can’t make things well. “The mentality is very complicated,” he said. “[People have] always made us think that we are less. We ourselves think that. Logically we have less resources, we have a lower level of education and so on — but we have to change that. If we don’t, who will?”

Quantum’s Bolivian factory is located in the town of Tiquipaya.

On its U-shaped assembly floor, employees piece together the small electric cars.

First the metal chassis and frame are welded together, and then other components like the motor, battery, and wiring are added.

It takes the small factory five days to produce a complete car.

On the drive out of Cochabamba toward Tiquipaya, where Quantum’s Bolivian factory is located, the buildings shrink and the plants take over. Down a dirt road are two metal structures, like aircraft hangars, surrounded by farmland with ridges of neatly tilled soil. At the end of the road, the sounds of birds and insects were joined by those of metal being worked — and “Macarena,” pumping loudly from tinny speakers.

Marcelo Durán, Quantum’s head of marketing, took Rest of World on a factory tour, starting with the assembly line, a tight U shape, along which the cars take shape. At the first station, a man with a blowtorch soldered together the metal chassis. Next to him, a woman with her cap on backward filed the joints smooth in a shower of sparks. Another man screwed the rest of the metal frame onto the chassis. Afterward, the motor and batteries would be slotted in and the electronics wired, before the dashboard and steering wheel are glued and screwed together. Finally, the seat and the external fiber structure are added. Everything is done by hand; it takes five days to make a complete car.

The factory was scattered with badges declaring “Hecho en Bolivia” — Made in Bolivia. In actuality, Quantum admits that about half of each car is made in the country. And the most technically advanced components are imported from China — bits like the controller, motor, batteries, and electronics. What Benjamín Villegas, who manages the factory, calls “the heart of an electric car.” He described a kind of iterative process with their Chinese providers: Quantum sends designs to China, receives the parts, tests them, then revises the designs and sends them to China again. The factory was full of boxes and manuals bearing Chinese characters.

Durán ushered Rest of World over to the very first prototype Quantum made. Curvy, white, and purple, it looked like a deep-sea explorer. On the floor next to it, collecting dust, was the lithium battery ceremonially presented to Quantum by YLB, the state company responsible for extracting and industrializing Bolivia’s lithium reserves. In September 2021, YLB and Quantum signed an agreement to work together toward the goal of putting Bolivian batteries in Bolivian EVs. The battery’s plastic cover was transparent, and Durán pointed to the lithium cells inside.

Since Quantum’s launch, there has been some ambiguity over whether any of its vehicles run on a Bolivian lithium battery. In a 2021 visit to Mexico, President Luis Arce claimed that a Cochabamba company was producing vehicles with batteries made in Bolivia. But in the factory, Durán clarified that their cars don’t generally use Bolivian batteries — yet. “[YLB] made it as a prototype, but it has less capacity than the one we use,” he said. “Still, it showed that they can do it.” Márquez said that two YLB batteries were being tested in cars, and that Quantum was expecting the first delivery of 10 working battery packs from YLB in the coming weeks.

Both Quantum and YLB say that, ultimately, they want all of Quantum’s EVs to run on Bolivian batteries. Back when Márquez first had the idea for Quantum, in 2017, people thought Bolivia’s lithium project would be up and running by now. But despite almost a billion dollars of investment over 14 years, almost all of Bolivia’s lithium remains in the ground. This is, in part, because Bolivia’s salt flats have a rainy season, and the brine within them contains high levels of impurities. Both of these factors impede the use of evaporitic pools to extract lithium. YLB is now running pilot studies with eight international companies competing to help extract Bolivia’s lithium using a different method.

Even if all goes as planned, industrial production is years away. But the small amount of lithium cells being produced by YLB’s pilot plant will soon be used by a new Quantum Motors subsidiary, Quantum Batteries, to make electric batteries for Quantum’s EVs. With an investment of $500,000 from Bolpegas, a company that provides services to the oil and gas industry, Quantum Batteries will make batteries for 50 EVs a month. They will be more expensive than those imported from China, but Márquez said he believes it will be worth it to simplify logistics and have technical support close at hand. It also goes nicely with their Made-in-Bolivia marketing — and will no doubt help keep the government happy.

“When we close that circle—then we will be able to talk about the industrialization of lithium.”

“The interesting thing for me personally, the landmark, will be when this battery” — Durán pointed at the YLB battery — “is put in a vehicle that we have sold. Then you’ll have an electric car made in Bolivia that works with a battery made in Bolivia. Right now, we have the battery, but it isn’t yet in the car. That last part is pending. When we close that circle — then we will be able to talk about the industrialization of lithium.”

Even without full Bolivian batteries, the lithium connection has helped give Quantum a level of brand recognition utterly out of proportion with its scale. People are intrigued by the company as a startup in a country without many, an exemplar of national industry and a sign of Bolivia’s lithium-powered future. Durán said the company hired him precisely to turn this recognition into sales.

Throughout the factory tour, Durán pulled out his phone to show various marketing campaigns the company had come up with. There were clips of Quantum vehicles battling up La Paz’s steepest slopes or venturing out to popular landmarks, showing off their power and range. Another showed the “electric caravan” that Quantum mobilized in April 2021, which featured upward of 100 EVs, around 40 of them Quantum cars, parading around Cochabamba. Messages kept flooding in at the top of Durán’s screen; he said that they receive 10,000 messages a month on social media.

A message popped up from José Prado. Durán opened it and smiled. Prado had made an emoji of himself in a Quantum. Durán, it seemed, still knew every customer by name.

Advanced components for Quantum’s vehicles, like the controller, motor, and batteries, are imported from China.

Quantum has an eventual goal of putting Bolivian batteries in Bolivian EVs.

But even without a Bolivian battery, Quantum has become a sign of the country’s lithium-powered future.

So far, China is the only place in the world where tiny electric cars have had real success. Because Chinese industry fabricates all the components necessary to build these vehicles at scale means that the resulting cars cost from around $2,500 and provide low-income people with uniquely affordable vehicles. A Quantum car, by contrast, costs about $6,000 — in a country where the average person earns half as much as in China.

Márquez and Soruco are well aware of the difference in markets and recognize that, so far, their clients have come predominantly from middle-class and upper-class demographics. But both insist that a Quantum is a car for the mass market — and that their ambition is for Quantum, and Bolivia, to be the South American continent’s leader in electric mobility.

“We have the cheapest car on the market, with the lowest associated costs,” said Soruco. “That is, less spent on fuel, less spent on repairs, less spent on insurance, less spent on taxes.” He added that Quantum is developing financing options to help people make the initial investment, including direct credit: lending people money to buy their cars. “Nine in 10 Latin Americans don’t have access to credit for a car,” he said. “So that’s where we need to help: giving credit to that person. And in Latin America, Bolivia — we’re experts in microfinance.”

There’s one problem: a Quantum might be the cheapest firsthand car in Bolivia, but it isn’t the cheapest car. Secondhand and contraband cars can cost the same — or less — and they don’t have the same limitations that a Quantum does when it comes to speed, range, load, and terrain. Those limitations, said Tim Schwanen, director of the Transport Studies Unit at the University of Oxford, mean Quantum will only ever have a niche market.

Carlos Soruco, cofounder of Quantum, says they are developing financing options to help people in Latin America afford Quantum’s cars.

Freddy Koch, an electric mobility expert in Bolivia with Swisscontact, an international development organization, believes Quantum’s biggest problem is Bolivia’s fossil fuel subsidies. Bolivia is a producer of natural gas, which some of the country’s cars now run on, and it sells it cheap. The government also imports gasoline and diesel, which it then sells to Bolivians for between one-third and one-half of the price — an expensive and regressive policy. But fossil fuel subsidies are notoriously difficult to scale back. The last time the Bolivian government tried, back in 2010, it triggered massive protests.

That said, Koch is also confident that Quantum will succeed — just not on the grand scale the cofounders envisage. He sees Quantum as a new kind of EV manufacturer — small, agile, artisanal — made possible by the willingness of Chinese companies to export components. In Latin America alone, similar businesses have sprung up in Argentina, Mexico, and Guatemala.

“These startups have become assemblers of vehicles,” said Koch. “They import the parts because they have lower tariffs; they put them together, and they do so for less than it costs to import a car.” Then they can respond to demand in a way large-scale manufacturers cannot. “They have multipurpose assembly lines. So, one day, they are putting together a car, the next, they are putting together a motorbike, and, the next day on the same line, they might be assembling a little truck.” He thinks Quantum is finding its niche in Bolivia, and could take the same niche in other countries. “But we are talking about markets of no more than 500 vehicles a year sold.” So far, Schwanen and Koch’s predictions seem to be borne out by Quantum’s sales.

According to Durán, Quantum has three main client profiles: students, entrepreneurs, and businesses. The first are young people given money by their parents to buy their first car. The second are fellow entrepreneurs who saw the potential of turning their Quantum — so unusual and eye-catching on the road in Bolivia — into a mobile advertisement, by slapping their own logo on the side. And the third are bigger businesses that are drawn to the savings of going electric over the long term. All of these markets have potential, but none is the Bolivian mass market. José Prado described the other Quantum owners he knows as “near elite.”

Quantum might reach a larger market if the government put in place policies to support it, according to Jone Orbea, electromobility leader at the United Nations Environment Programme. These could include tax exemptions, subsidizing replacement batteries, or releasing EVs from restrictions on circulation in polluted city centers. But, so far, it has limited itself to publicity moves. Quantum attended last year’s Dubai Expo, and there has been mention of providing free electricity — already cheap — to Bolivia’s few public charging stations in the near future.

“They import the parts because they have lower tariffs, they put them together, and they do so for less than it costs to import a car.”

In one sense, the government has dealt Quantum a blow: last year, it slashed tariffs on imported EVs — but not on the components to make them. A few businesses have since cropped up selling tiny EVs imported from China, in direct competition with Quantum. But Márquez swatted away the suggestion that the lack of support from the government is a problem. “You can’t make a business plan based on help from the government, especially if it doesn’t exist. … I don’t expect anything — only that they don’t put obstacles in our way,” he said.

Instead, Quantum has set its sights on international expansion. It has already opened franchises in Peru, Paraguay, and El Salvador. Together with Potencia Industrial, a larger and older Mexican manufacturing business, it has set up a new company in Mexico, which is building a second factory to produce Quantum vehicles. With the capacity to make 100 cars a month, it could more than double the company’s potential output. By 2024, Márquez said, Quantum plans to have sold almost 10,000 vehicles (not just cars) across the continent. That figure is part of its pitch for new investors. They’re looking for another $2 million to drive their expansion, before larger manufacturers enter the tiny EV field.

Schwanen says their concern is overblown: it will take a lot of market interest for large car manufacturers to start paying attention. Their overriding interest is to convince customers they need bigger cars — ones that have bigger profit margins. And then these big companies also suffer from inertia: “Locked-in routines, mindsets, business models — not being willing or able to do something they would see as very risky,” Schwanen said.

Even so, China has shown that established carmakers may have interest at some point. Until recently, tiny EVs in the country were the domain of smaller companies. But in 2020, Wuling Motors — a joint venture of General Motors, SAIC Motor, and Liuzhou Wuling Motors — put out the Hongguang Mini EV, a compact four-seater. It’s now the best selling EV in China. Soruco believes it’s just a matter of time before big manufacturers try to muscle in in Latin America too. “We were recently talking with a businessman with many years of experience, and he told us, You need to expand abroad right now, because what you have is the advantage of a few years,” he said.

By 2024 Quantum plans to have sold 10,000 vehicles across the continent.

Back in Santa Cruz de la Sierra, the food finished and the plates stacked, Prado let his hair down from its ponytail, as he considered Quantum’s prospects in Bolivia.

Like every Quantum owner who spoke with Rest of World, he was evangelical about the car: the experience, the economy, the relationship with Quantum itself. But he acknowledged that he’s on the eccentric side. It’s been more than two years since Quantum launched its car, and he’s still encountered only a handful of others in Bolivia’s largest city. “It doesn’t fit in at all, and that worries me,” he said. “Taxi drivers want cars that they can load up with cargo, and macho men aren’t attracted by a vehicle like this: one that doesn’t compete, roar, and trample the rest. So the niche for Quantum will probably be university students, old ladies — and strange folk like me.”

Thomas Graham is a freelance journalist based in La Paz.

Rest of World (22 de Abril de 2022) Thomas Graham https://restofworld.org/2022/quantum-motors-bolivia-electric-cars/