The euphoria of the electric car in Brazil

 

The automotive industry in Brazil has become more optimistic about the electric vehicle scenario for the coming years.

Jato Dynamics, which operates in countries such as the United States, Brazil and Germany, has just raised its forecast for the share of electrified vehicles (electric and hybrid) in sales in the domestic market in 2030. Expectations have risen from 12.5% at the beginning of the year to just over 25%. This does not include hybrids.

The more optimistic scenario now reflects factors such as the creation of programs such as Mover (Green Innovation and Mobility Program) and the global industry's move toward electrification of engines. In January and February alone, the share of electrified vehicles (including sedans, hatchbacks, station wagons, SUVs, convertibles, among others, and excluding light commercial vehicles) in Brazilian sales was 9.34%.

Electrified vehicles (excluding light hybrids) are expected to account for nearly 26% of passenger car and light commercial vehicle sales in the domestic market by 2030.

The consulting firm KPMG recently asked Brazilian executives how confident they were about the growth of the automotive sector over the next five years. Some 40% of them said they were very confident, an increase of more than ten percentage points from the previous year's survey. The natural optimism of Brazilians must be considered here, but it is a good figure compared to the more pessimistic scenarios in the United States and Europe.

In all of this, China is benefiting from lower production costs, while European and American companies are being forced to cut their margins to face new competitors. Many Western companies are competing to lower prices because the Chinese have come up with more competitive prices. This automatically reduces profits. Brazil is feeding on this Chinese trend. 

In fact, in the last few months, several car manufacturers installed in the country have announced a series of contributions, already exceeding 70 billion reais, to produce electrified vehicles and the expansion of factories, among other measures.

Stellantis, for example, pledged to invest R$ 30 billion between 2025 and 2030, focusing on the development of flexible hybrid models capable of running on electricity, ethanol, and gasoline. In addition to Stellantis and Toyota, new investments include Hyundai, Volkswagen, and General Motors. It is a trend that is consolidating in Brazil and will have a cascading effect on the rest of the Southern Cone.



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