The electric car (EV) is a subject that has gained strength in Brazil since the early 2000s. Despite gaining notoriety in newspapers and by public authorities, the vehicle is still little used by the population.
According to a survey by ABVE (Brazilian Electric Vehicle Association), the electrified car totaled 4,500 units sold in January 2023. This value is equivalent to only 3.4% of passenger and light commercial vehicles in the country.
However, following the global trend, the model should become predominant in Brazil. That’s what experts heard by R7 say.
“Electrified vehicles will certainly be the largest market share in every country in the world in a few years. The question is not if they will dominate the market, but when they will dominate the market”, analyzes Adalberto Maluf, president of ABVE.
According to the association’s data, total sales in the automotive market in January 2023 grew by 11.9% compared to the same month in 2022. The share of electrified vehicles, in the period, increased by 76%. Compared to January 2021, the growth of non-combustion powered cars skyrocketed by 241%.
Compared to developed countries, Brazilian numbers are still below. In China, 30% of cars sold in 2022 were electric. In this sense, it is worth mentioning that 22% of all electrified vehicles in the world are produced in the Asian nation. The data is from Volumes EV.
Last year Germany saw 55% of its sales in the sector correspond to EVs. “In 2019, it was 3%”, emphasizes Maluf.
Norway is perhaps the case that draws the most attention to the world. Over there, according to the Norwegian Road Federation, battery cars accounted for 94% of sales last year.
“(Norway) reached this level first because of its geographic, political and population characteristics. It is a small country with a very high level of education. But there was a great incentive for the electric car, it was, let’s say, on the wave of a great carbon reduction policy of Norwegian society. There is a government hand behind this, which created different (incentive) mechanisms”, says Ricardo David, founding partner of Elev, a company specialized in the electromobility sector.
Regarding the United States, Adalberto Maluf argues that “the country was a little behind”, having gone from 2.2% of sales of the electrified segment to 6.1% last year.
“The goal of the new American government, and major incentives have been approved in the last two years, is to reach 50% of electric vehicles in 2030. So, electrification is the main technological route for the decarbonization of transport in the world. This is official UN program. The European Union has banned the sale of combustion vehicles”, says the expert.
What’s missing in Brazil
According to Maluf and David, Brazil’s underperformance in this market is explained by structural economic and political reasons. In this context, the main reason is the incidence of taxes, which make the EV more expensive than the one powered by fossil fuels.
“In Brazil, today, taxation on an electric car is higher than on a combustion car. If you take the whole chain of taxes, you pay more taxes on the electric car. If an extraterrestrial arrives here and sees only the tax policy, he will say that there must be some problem in society with electric cars, which are penalized more. And it’s not a society problem with the electric car: it’s the lack of a centralizing hand that integrates municipal, state and federal efforts”, says Ricardo David.
Next, he explains that the product goes through three spheres of encumbrance: municipal, with the IPVA (Tax on the Ownership of Motor Vehicles); state, with the ICMS (Tax on Circulation of Goods and Services) and federal, with the IPI (Tax on Industrialized Products).
For the ELEV member, there is no set of laws on electromobility in the country. In this sense, he blames the president, governors and mayors for this situation.
In his view, an industrial policy would be necessary to encourage national production in the sector and, thus, the popularization of the electric car.
Ethanol
On the last 22nd, a statement from the corporate world on the subject reverberated in the market. Carlos Tavares, president of the car maker Stellantis, said that electric cars are not necessary for the Brazilian, during a press conference.
This is because ethanol is a renewable biofuel, unlike gasoline, and is produced in the country. The company emerged from the merger of Fiat Chrysler and Peugeot Citroën.
In this context, there are hybrid vehicles. They are those that have an engine powered by fossil fuels, but at the same time rely on electricity to move. This division is not always equal, with half for each.
In practice, hybrids can be considered a ‘middle ground’ between traditional and electrified vehicles.
In turn, Ricardo David believes that the hybrid ethanol vehicle “is an excellent travel companion in this growth for the total sustainability of urban mobility in Brazil”. However, he disagrees with Tavares.
“Electric cars have, on average, only 35% of the components of combustion vehicles, which already suggests that, in order to produce a car, even if it runs on ethanol, we will need to emit more pollutants than the electric equivalent. electric vehicle does not emit pollutants, while ethanol vehicles normally admit the Flex version, which allows the use of gasoline, resulting in the generation of greenhouse gases”.
Furthermore, unlike Tavares, David claims that vehicles powered by renewable fuel do not replace electrified ones. “The hybrid ethanol model seems to us the perfect partner to lead Brazil towards the energy transition.”
“It’s not one to take the other away. They are not opponents. A national policy could signal the coexistence of the two, which could coexist well until obviously we could have the ideal, which would be pure electric. But we are not going to have that one day to another until we have the most favorable conditions for full electrification”, completes the head of Elev.
The report sought out the CEO of Stellantis. However, he declined to comment.
*Intern of R7under the supervision of Ana Vinhas.
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