Electricity subsidy costs the government $600 million a year; U.S. and Ecuadorian military leaders meet in Esmeraldas; Chinese cars dominate the market

The government agrees with energy experts that the subsidy for electricity should be reduced or eliminated. Through the first six months of 2026, customers paid an average of 10.61 cents per kilowatt hour (kWh) while the “real generation, distribution and management cost” is 12.83 cents. For the year, the total subsidy is projected to be $598 million. According to Paulo Peña, founder of energy consulting firm Energy Advice, the subsidy began in the early 1970s and at one time amounted to more than 60% of actual cost. “As with other government subsidies, politics interfered with billing rates,” he said. “Originally, the subsidy was intended for poor families but, as with LP gas, it has been applied to all customers, most of whom can afford to pay full price.” Sales of Chinese cars and trucks are growing “exponentially,” according to Ecuador car dealers, and now account for 60% of all sales. He added: “An egregious example of this are large corporations, including mining operations, who consume a large portion of the country’s electricity.” Although the government agrees the subsidy should be reduced and says it is “studying the issue,” Peña says he is not aware of any plan to adjust kilowatt hour charges. U.S. and Ecuador military leaders meet in Esmeraldas General Francis L. Donovan, head of the U.S. Southern Command (SouthCom), met last week with Ecuadorian military leaders to “review and evaluate” joint security operations in Esmeraldas Province, which borders Colombia. According to a SouthCom press release, Donovan presented operational plans to strengthen security on Ecuador’s northern border. Officers from both countries conducted a river tour “to learn about the operational capabilities of the deployed Ecuadorian units and observe the surveillance and control work carried out by military personnel in various sectors of Esmeraldas.” The group also toured the medical clinic at the San Lorenzo Marine Infantry Battalion headquarters to evaluate ways to strengthen medical care for military personnel. Following the SouthCom visit, Ecuador’s Defense Ministry said the focus of the meetings was to “cut off” cocaine transport routes from Colombia and to reduce “hiding places for narco terrorists.” Chinese cars dominate the market Sales of cars and light trucks manufactured in China are “increasing exponentially,” accounting for almost 60% of all Ecuadorian sales through the first six months of 2026, according to the Ecuador Automotive Chamber. The chamber attributes the growth in market share to the free trade agreement signed by Ecuador and China in 2024. Based on the agreement, tariffs on cars and light trucks dropped from 40% to 32% in two years and will drop to 29% in 2027. Prior to the trade agreement, in 2023, sales of Chinese vehicles accounted for 37% of Ecuador sales. The chamber predicts that Chinese vehicles will continue to gain market share. “These cars and trucks offer a great value to Ecuadorian buyers, costing as much as 25% less than comparable Japanese, U.S. and European models,” it said, adding that Chinese vehicles “already dominate the market in most South American countries.” Ecuador goes to orange alert for El Niño The Nacional Emergency Operations Committee has raised the alert level for the approaching El Niño from yellow to orange. In a statement, the committee said that continued strengthening of the weather system required “an increased level of preparedness.” “The latest forecast is that the El Niño weather phenomenon could be one of the most dangerous on record and authorities in vulnerable areas must intensify efforts to prepare for catastrophic flooding,” COE said. “Potentially, this event could be more destructive than the 1997-1998 El Niño.” The orange alert applies to 17 provinces, 143 cantons and 491 parishes, at elevations up to 1,500 meters. The post Electricity subsidy costs the government $600 million a year; U.S. and Ecuadorian military leaders meet in Esmeraldas; Chinese cars dominate the market appeared first on CuencaHighLife.