{"id":91488,"date":"2024-10-24T10:52:32","date_gmt":"2024-10-24T13:52:32","guid":{"rendered":"https:\/\/murray.adv.br\/?p=91488"},"modified":"2024-10-24T10:52:33","modified_gmt":"2024-10-24T13:52:33","slug":"investment-in-hybrids-evs-surpasses-r63bn-in-brazil","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/investment-in-hybrids-evs-surpasses-r63bn-in-brazil\/","title":{"rendered":"Investment in hybrids, EVs surpasses R$63bn in Brazil"},"content":{"rendered":"\n<h6 class=\"wp-block-heading has-text-align-center\"><em><strong>In an accelerated transition scenario, hybrid and electric vehicles are projected to dominate local market, comprising 54% of sales by 2030<\/strong><\/em><\/h6>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>10\/24\/2024 <\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/s2-valorinternational.glbimg.com\/yw9CCgatn90cbJbCyzzVs6gKw_8=\/984x0\/smart\/filters:strip_icc()\/i.s3.glbimg.com\/v1\/AUTH_63b422c2caee4269b8b34177e8876b93\/internal_photos\/bs\/2024\/Z\/U\/qUEjAXSmewyQf1YBoK6g\/foto24emp-101-marli-b4.jpg\" alt=\"Raquel Mizoe \u2014 Foto: Divulga\u00e7\u00e3o\" style=\"width:466px;height:auto\" \/><figcaption class=\"wp-element-caption\"><em>Raquel Mizoe \u2014 Photo: Divulga\u00e7\u00e3o<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<p>In five years, sales of hybrid and electric vehicles are expected to surpass those of combustion models. According to consultancy studies commissioned by the industry, this shift may occur even sooner. Currently, hybrid and electric vehicles (EVs) make up 7% of the market, but their share is set to grow rapidly starting in 2025, when the first results of investments aimed at the new generation of vehicles will begin to materialize. Expert estimates suggest that at least half of the announced cycles will be dedicated to electrification, amounting to over R$63 billion.<\/p>\n\n\n\n<p>Since the end of last year, Brazil has witnessed a wave of successive investment announcements from automakers. With an additional R$1.1 billion from BMW announced earlier this month, total investment in the light vehicle industry now reaches R$116.65 billion for the decade. Adding R$10.6 billion from truck and bus manufacturers, the total rises to R$127.3 billion, marking the highest level of investment in the history of the automotive industry in the country over a ten-year period.<\/p>\n\n\n\n<p>Of this total, at least 50% will be allocated to the development of electrified cars, primarily hybrids that run on ethanol, according to estimates by Paulo Cardamone, president of Bright Consulting, a firm specializing in the sector. However, investments in the new generation of vehicles could be even higher, considering the details revealed by companies in their announcements of new cycles.<\/p>\n\n\n\n<p>At the start of Brazil\u2019s energy transition in the automotive sector, hybrids are expected to dominate national production, according to expert projections and automakers\u2019 announced programs. During this phase, Brazil\u2019s unique formula for integrating itself into the global decarbonization process will play a key role: the development of hybrid models that can be fueled with ethanol.<\/p>\n\n\n\n<p>The first ethanol-hybrid vehicle of this new investment phase will be a Fiat model, scheduled for release on November 5. Fiat, a brand under Stellantis, will join Toyota and CAOA Chery, which already produce such vehicles in Brazil.<\/p>\n\n\n\n<p>Except for the recently arrived Chinese automakers, which need to invest in new factories, the largest established companies in the sector are not including industrial expansion in their new investment cycles. Instead, most of the funds will be directed toward the development of new products.<\/p>\n\n\n\n<p>M\u00e1rcio de Lima Leite, president of the Brazilian Association of Automotive Vehicle Manufacturers (ANFAVEA), confirmed that a significant portion of the announced programs will focus on hybrids and the development of biofuel-powered engines. \u201cThe need for a technology shift is driving our members to make these substantial investments,\u201d he said.<\/p>\n\n\n\n<p>For several years, heavy investments in electromobility have also been underway in the U.S., Europe, and China.<\/p>\n\n\n\n<p>In Brazil, a study conducted jointly by ANFAVEA and the Boston Consulting Group (BCG) presents two scenarios. In the accelerated transition scenario, hybrids and electric vehicles would dominate the market, accounting for 54% of sales by 2030. In a more gradual transition, combustion vehicles would lose market leadership slightly after 2030. By 2035, electrified vehicles are projected to represent 65% of the market.<\/p>\n\n\n\n<p>Bright Consulting\u2019s projection is even more optimistic, predicting that electrified vehicles will lead the market by 2028. The consultancy estimates a 57.4% market share within three years. By 2030, the share of combustion vehicles is expected to drop from the current 96% to 28%, according to the study.<\/p>\n\n\n\n<p>The BCG study suggests that only by 2040 will fully electric models dominate Brazil\u2019s new vehicle market.<\/p>\n\n\n\n<p>The announcement of the new investment cycles aligns with the launch of Mover (Green Mobility and Innovation), a federal program that provides tax credits in exchange for commitments to product development and decarbonization, among other incentives. For instance, companies that invest at least 0.5% of their revenue in research and development will benefit from reduced taxes.<\/p>\n\n\n\n<p>This benefit also applies to the export of engineering services. \u201cBrazil has the potential to export its expertise in biofuels,\u201d said Raquel Mizoe, director of emissions at the Automotive Engineering Association (AEA).<\/p>\n\n\n\n<p>To qualify for the tax incentive, companies must also comply with new CO2 emissions standards. Another aspect of the Mover program, which still requires regulation, is the measurement of CO2 emissions across the entire vehicle lifecycle, from production to consumption. Currently, emissions measurement is limited to what exits the tailpipe.<\/p>\n\n\n\n<p>However, the drive to reduce greenhouse gas emissions is not the only factor pushing automakers to develop cleaner vehicles. Ms. Mizoe noted that Brazil\u2019s regulations for other gases are becoming increasingly stringent.<\/p>\n\n\n\n<p>\u201cThe PROCONVE [Vehicle Emissions Control Program] legislation, which aims to protect public health, is imposing stricter limits on gases like nitrogen oxide, hydrocarbons, and soot. These rules require changes to components like the catalytic converter,\u201d she said. The next stage of PROCONVE, known as L8, will come into effect in early 2025.<\/p>\n\n\n\n<p>In the initial phase of the energy transition in Brazil, the mass market will be shaped by the so-called mild hybrid, a more affordable hybrid car where the electric motor never operates independently but assists the combustion engine in reducing emissions.<\/p>\n\n\n\n<p>Ms. Mizoe said mild hybrids offer fuel savings and emissions reductions of 8% to 10% compared to combustion vehicles. For conventional hybrids, the reduction reaches 20% to 25%.<\/p>\n\n\n\n<p>Mild hybrids are part of the development plans of major automakers like Stellantis and Volkswagen. These models, more affordable than fully electric vehicles, are the way these companies aim to maintain market leadership.<\/p>\n\n\n\n<p>\u201cWe will have a slower transition, but that doesn\u2019t mean we\u2019re lagging,\u201d said Mr. Leite, president of ANFAVEA, which strongly advocates for the use of ethanol in the decarbonization process and opposes the increasing import of electric vehicles from China. \u201cBrazil has already found its path with biofuels,\u201d he said.<\/p>\n\n\n\n<p>While automakers\u2019 executives often claim there is room for all technologies, hybrid and electric vehicle advocates are already taking sides. Like ANFAVEA, the AEA supports what Ms. Mizoe calls \u201chybridization with ethanol.\u201d<\/p>\n\n\n\n<p>Those who support hybrid models point to the need not only to leverage Brazil\u2019s expertise in biofuels but also to preserve the country\u2019s existing auto parts industry. They also highlight the need to expand the infrastructure of electric charging stations to support fully electric vehicles on highways.<\/p>\n\n\n\n<p>The growth of the fully electric fleet will require Brazil to have 500,000 charging stations by 2040, according to ANFAVEA. Currently, there are only 10,600 stations.<\/p>\n\n\n\n<p>The higher cost of fully electric models still limits their appeal to wealthier consumers. However, this obstacle is likely to be overcome soon with the use of new minerals in batteries and the potential for recycling these materials, said consultant Jaime Ardila, a specialist in the field and founder of U.S.-based firm Hawksbill.<\/p>\n\n\n\n<p>Mr. Ardila noted that the replacement of lithium with sodium is already helping to reduce battery costs, the most expensive component of an electric vehicle. \u201cLithium, which is much more expensive, will lose ground. Advances in recycling these new minerals have been significant; in Europe, it will soon be mandatory,\u201d he said.<\/p>\n\n\n\n<p>\u201cWith lower costs and recycling, demand for fully electric vehicles will rise because consumers will prefer them,\u201d he said. Mr. Ardila believes the dominance of hybrids in Brazil will be temporary. \u201cNo more than five years,\u201d he said. Additionally, he noted that the ongoing investments are increasingly directed toward electrification technologies.<\/p>\n\n\n\n<p>\u201cIt would be a huge mistake to make such large investments in new combustion vehicles, which will have a short lifespan. Automakers\u2019 headquarters will not support such a strategy,\u201d Mr. Ardila added.<\/p>\n\n\n\n<p>\u201cExcept for those who love the sound of an engine, electric cars offer more technology and all the benefits of decarbonization,\u201d said Ricardo Bastos, president of the Brazilian Electric Vehicle Association (ABVE).<\/p>\n\n\n\n<p>Electrification, whether hybrid or fully electric, is here to stay, and federal programs are supporting the cause. The government now owes a public policy for vehicle inspections to remove polluting and unsafe cars, trucks, and buses from Brazil\u2019s roads.<\/p>\n\n\n\n<p>*By Marli Olmos \u2014 S\u00e3o Paulo<\/p>\n\n\n\n<p>Source: Valor International<\/p>\n\n\n\n<figure class=\"wp-block-embed\"><div class=\"wp-block-embed__wrapper\">\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>In an accelerated transition scenario, hybrid and electric vehicles are projected to dominate local market, comprising 54% of sales by 2030 10\/24\/2024 In five years, sales of hybrid and electric vehicles are expected to surpass those of combustion models. According to consultancy studies commissioned by the industry, this shift may occur even sooner. Currently, hybrid [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[25570,25569],"class_list":["post-91488","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-accelerated-transition-scenario","tag-investment-in-hybrids-and-evs"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Investment in hybrids, EVs surpasses R$63bn in Brazil - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/investment-in-hybrids-evs-surpasses-r63bn-in-brazil\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Investment in hybrids, EVs surpasses R$63bn in Brazil - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"In an accelerated transition scenario, hybrid and electric vehicles are projected to dominate local market, comprising 54% of sales by 2030 10\/24\/2024 In five years, sales of hybrid and electric vehicles are expected to surpass those of combustion models. 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