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Electric vehicles to coexist in shadow of those powered by biofuels in Brazil – Platts

  • EVs to account for only 7.4% of sales by 2030: consulting firm
  • No state subsidies or incentives are expected
Projected light vehicles fleet profile by fuel in Brazil between 2014 and 2050. (Géremi Gilson Dranka and Paula Ferreira)

Adriana Carvalho and Camila Martinez, Platts S&P Global

RIO/SAO PAULO
EnergiesNet.com 09 11 2023

The Brazilian transition to electric vehicles is likely to be stuck in idle as momentum stays with sustainable alternatives such as biofuels, Marcio Lima Leite, president of National Association of Automotive Vehicle Manufacturers, said on the sidelines of the recent Anfavea Seminar in Brasilia.

EV sales in Brazil are forecast to account for only 7.4% of total sales in 2030, according to a study by Bright Consulting. EVs and plug-in hybrids are forecast to account for 12.8% in the period, with total hybrid models alone to hit 37.5%.

The forecast is also based on the premises that most sales have been made to corporate entities and transport companies,

“There are income differences and skepticism also delaying such a transition,” Bright Consulting CEO Paulo Cardamone said, also on the sidelines of the conference.

Sales of electrified cars

In 2022, sales of electrified cars, meaning electrics, plug-in hybrids and hybrid models, totaled 49,245 vehicles, according to data compiled by the Brazilian Electric Vehicle Association, or ABVE. That represents growth of 41%, compared with the previous year. Battery electric vehicles, or BEVs, represented 8,460 units.

ABVE expects the number of charging stations to reach 10,000 units by the year 2025, compared with the current 1,600 units. Of the 26 Brazilian states, 10 still lack charging infrastructure.

“We are the only country in the G20 that does not have a national plan for electric mobility,” national environment secretary Adalberto Maluf said on the sidelines of the conference. “How are we going to insert ourselves into this chain if there is no goal, there is no plan?”

He said that only 10% of total EV sales in the world were subsidized last year and that there was no guarantee of global automakers maintaining their factories in Brazil.

A law under discussion in Congress aims to regulate the integration of decarbonization policies in the country and to provide tax incentives to increase investments in clean energy, ensure legal certainty for the sector and set goals for the Brazilian decarbonization process.

The lack of legislation and regulation leaves the production chain vulnerable, in particular second-tier suppliers, Claudio Sahad, president of Sindipeças, the national union of the component industry for motor vehicles, said on the sidelines of the conference.

“Brazilian Tier 1 suppliers already participate in production chains worldwide, but small and medium-sized companies need support in transitioning to producing parts for electric cars,” he said. “If we only import electric cars, we won’t have the ability to produce components.”

Lithium production chain

Ana Cabral-Gardner, CEO and co-chair of the board of Sigma Lithium, said during a panel discussion at the conference that Brazil has the potential to occupy a key position in the production chain of pre-chemical and chemical materials for lithium battery cells to be produced in Brazil and globally.

She said what is produced in the Brazilian Lithium Valley nowadays would be able to supply 700,000 new EV cars this year, 1.6 million EVs in 2024 and 3 million EVs in 2025.

“It means an annual volume of EVs that we won’t see in Brazil for some time, but in the Northern Hemisphere, where you’re looking at 11 million cars per year for next year, it’s today’s reality,” Cabral-Gardner said.

Moreover, she highlighted that Brazil is a carbon-neutral choice, given its 88% clean energy matrix ranking, for its hydraulic energy, biomass, wind and solar.

“Who is going to compete with us in this race for the midstream that is out there, without an owner?” Cabral-Gardner said. “Because a good part of the upstream takes place in countries full of carbon. If you offer a low-carbon, geopolitically friendly alternative, you become a midstream place of choice.”

The company is currently operating at about 75% of nameplate throughput capacity at Phase 1, she said. It expects to reach Phase 2 and 3 full capacity in 2024 and increase production to 766,00 mt/year.

spglobal.com 09 08 2023

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