MONTEVIDEO, URUGUAY – The government of Uruguay, in a move to expand investment in new industries and technologies, has set aside land for an electric-vehicle assembly plant expected to begin construction next month by U.S. electric car pioneer ZAP, according to MarketWire.

The State of Montevideo has granted an acre of land to ZAP within an industrial and technology park established for projects of national interest through CAPIT (Comision Administradora del Parque Industrial y Tecnologico del Cerro). According to Fernando Cancela, ZAP's director of international affairs, ZAP plans to break ground by next month on a comprehensive facility for the assembly of light electric vehicles, including the Xebra brand, three-wheeled electric sedans and trucks, the ZAPPY3 scooter, and ZAP electric bicycles for distribution throughout South America.

Daniel Martinez, the Uruguayan Minister of Energy, announced the project with ZAP to the Uruguayan congress last week. He proposed further investments in electric vehicles as a way to create new industries that can restore the balance of trade with other countries in the region. With Brazil, for example, Uruguay has a 10-1 trade deficit.

MERCOSUR is a trade agreement established in South America to promote free trade and fluid movement of goods, people, and currency. The region represents a population of more than 250 million in Argentina, Brazil, Paraguay, Uruguay, Bolivia, Chile, Colombia, Ecuador, and Peru. MERCOSUR-certified products exported within the region enjoy little or no taxes.

Under the Uruguay agreement, ZAP plans to ship the parts to its new facility for final assembly. According to Cancela, if more than 50 percent of the value of the product is added under the CAPIT program, products will be certified as "Made in Uruguay" and have fewer taxes, if any, when exported within MERCOSUR.

ZAP has been operating a marketing unit in Montevideo since 2002 to develop assembly, marketing, and distribution programs in Latin America. Last year, ZAP partnered with the Uruguayan Postal Service and Coca-Cola on a fleet distribution model in Montevideo. In Chile, the national power company has started a program to promote electric transportation by offering its ratepayers financing on ZAP electric bikes, scooters, and motorcycles.