10 Sep 21

Brazil EV sales up amidst petrol price hikes

The transition to electric vehicles (EV) and hybrids in Brazil has been slow in recent years, but the significant increase in petrol price so far in 2021 just may be the catalyst to kick start EV implementation in the country.  

For more information on the state of the fleet market in Brazil and other fleet and mobility topics in the region, visit the Latin America regional stream of the Global Fleet Conference 2021. 
From January to August, there has been nine price hikes in the country, resulting in a 28% jump at the pumps and, according to local statistics bureau IBGE, the price of fuel has gone up some 37% over the last 12 months. 

In four Brazilian states, the price has topped seven reais (US$1.32) per liter, making it difficult for some who drive long distances such as Uber drivers and those making long-distance one-way deliveries. On Monday (6 September), the average price worldwide was US$1.19, according to energy price portal Global Petrol Prices. 

Meanwhile, full EV and hybrid car sales are up approximately 66% so far this year, according to the Brazilian Association of Electric Vehicles ABVE. Among the best-selling LCVs in Brazil in 2021 is the BYD ET3 e-van.

BYD ET3 e-van, 102 units sold in 1H21 (source: BYD)

Benefits of Electrifying 

Besides costing about a third less to run your vehicle on electricity than on gasoline, EVs offer lower maintenance. While an internal combustion engine (ICE) vehicle has some 2,000 moving parts, many EVs have less than 100. 
EVs also boast instant maximum torque while an ICE vehicle reaches maximum torque at around 3,000 RPM. Finally, they emit less pollution into the air, a "green" trend which has hit other regions of the world such as Europe and it looks to be gradually gaining popularity in Brazil. 

These vehicles, however, are still a bit expensive to purchase, coming in about double the price of an ICE vehicle. As such, evaluating driver profile is essential. In many cases, driving an average of at least 250km per day could be a qualifier for an EV.   
Government Initiatives 

The Brazilian government has implemented some incentives but much more could be offered. For now, EV's receive discounts on local vehicle tax IPVA as well as the IPI tax on industrialized products. 
Besides national electric energy agency Aneel passing Normative Resolution No. 819/2018 which regulates EV recharging fees, local paper Folha do Litoral reported that the city of São Paulo ratified Municipal Law No. 17.336 in March of 2021, a law which mandates the need to have EV recharging facilities in residential and commercial buildings in the capital city.

Furthermore, drivers of electrified vehicles in São Paulo are exempt from the traffic control driving restriction law known as "rodízio". 

As for infrastructure, recharging points have been installed along the BR-27 highway in the southern state of Paraná and the Presidente Dutra highway which connects the state capitals of São Paulo and Rio de Janeiro. 

Electric and hybrid cars could be dominating the vehicle market in Brazil by 2035, according to a survey carried out by the National Association of Motor Vehicle Manufacturers Anfavea in partnership with the Boston Consulting Group. 


Top Photo (source: Shutterstock)

Authored by: Daniel Bland