Brazil‘s Automotive Sector: A Lag in Electric Vehicle Adoption
A recent analysis of leading automakers’ strategies in the Brazilian light-duty vehicle market reveals a slower pace of electric vehicle (EV) deployment compared to major global automotive markets including China, Europe, the United States, Japan, India, and South Korea. While othre regions are experiencing accelerated electrification driven by stricter regulations and targeted incentives, Brazil’s automotive industry continues to prioritize flex-fuel hybrid vehicles and internal combustion engines.
this divergence is particularly concerning given Brazil’s advantageous position: the nation boasts a high proportion of renewable energy sources in its electricity grid, resulting in exceptionally low well-to-wheel emissions for battery electric vehicles (BEVs). The continued focus on flex-fuel technology, which blends gasoline and ethanol, generates significantly higher emissions than BEVs, perhaps jeopardizing Brazil’s commitment to achieving net-zero emissions by 2050.
Currently, the lack of dedicated public policies promoting EVs has allowed automakers to maintain thier existing production strategies. The existing Green Mobility and Innovation (MOVER) Program, while aiming for a 12% energy consumption reduction by 2027, is less ambitious than comparable international initiatives and continues to offer tax incentives for flex-fuel hybrids until 2026.
to accelerate EV adoption and align with long-term climate goals, policymakers should consider strengthening the MOVER program’s second phase (2027-2032) by implementing more stringent corporate average emissions reduction targets. Furthermore, the introduction of a feebate system – offering financial incentives for low-emission vehicles and penalties for high-emission ones - or a similar tax-based mechanism could effectively encourage both automakers and consumers to embrace electric mobility.
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