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Global EV Transportation Review

Key Regional Markets


Brazil’s electric vehicle market is a miniscule through growing sub-segment of a larger market led by flex or alternate fuels. The country’s flex-fuel automotive market is the world’s largest, due to ethanol. This is the context in which electric vehicles must find their space. At a policy level, the decarbonization measures indicate that there is scope for a varied mode of transportation such as in terms of biofuels, fuel cells as well as battery electric. The competitive share of electric vehicles will be shaped by factors including price, ease of access in fast-charging facilities, product varieties and the relative running cost efficiency.

GDP (Current Prices) USD (2021)

1,608.08 bn

GDP Growth Forecast (constant prices) (2021-2025)


EV Penetration

17% (battery electric) of the total new passenger vehicle sales in 2022

EV Target

Planned Year of Phasing Out ICE Vehicles

GDP Source: IMF, World Economic Outlook

EV Penetration and Trend

Source: Brazilian Electric Vehicle Association (ABVE)

Brazil’s electric vehicle market holds a miniscule share of the total automobile sales (about 2 million units as of 2022). Yet, it is a fast-growing sub-segment in an otherwise crowded and competitive market. Since 2019, there is a quadrupling of sales of electric vehicles. But notable growth is of battery electric vehicles where sales grew three-fold year-on-year in 2021 and 2022. The trend shows a sharp rise in the share of battery electric vehicles – from just 5% in 2019 to 17% by end of 2022.

The rise in share of battery electric vehicles is an important and much- needed shift for the overall electric vehicle market. Lack of options in local production (Toyota being the only company manufacturing hybrids locally) together with an inadequate charging infrastructure puts the battery electric sub- segment in an unfavourable position against hybrids or flex-fuel vehicles. Such a skew is unlikely to change significantly. Yet, with improvement in battery electric ecosystem, the retail sales can be expected to pick up gradually.

Source: Brazilian Electric Vehicle Association (ABVE)

Electrification is similarly gaining traction in Brazil’s commercial transportation sub-segment. Even as the sales penetration is negligible, there is notable evidence of its adoption in key sectors such as those of construction and mining. In August 2022, the global mining company Vale tested 72-tonne battery electric trucks at its Brazilian mining operations. Another mining major CSN Mineracao signed agreement with the Chinese equipment supplier SANY for 100% electric trucks in mining operations.

Leading global equipment manufacturers are finding rising procurement orders for electric buses by the Brazilian local authorities. Sao Paulo is the one city that leads in electric bus deployment. Its total fleet in this regard comprises 18 electric buses and 201 trolley-buses procured under the Zero Emission Bus Rapid Deployment Accelerator pilot programme (International Council on Clean Transportation) of 2019. The city has since then been moving rapidly towards electrification of transportation.

Charging Infrastructure

Note: Data is as of October 2021
Source: Statista

Brazil’s electric vehicle charging infrastructure has been mostly led through the power distribution utilities or the vehicle manufacturers. The country currently has about 1,250 public charging stations, of which 47% are concentrated in the Sao Paulo city. Further, the existing capacity lacks fast- charging capabilities which adds to the impediments for the industry seeking growth opportunities.

Policy Regulation

So far, Brazil’s policy and regulatory framework is not targeted at promotion of battery electric vehicles. The available support measures are instead geared towards alternate fuel options based on efficiency or emissions. With the recent change in the country’s ruling regime (and its stated intentions at overhauling environmental policies), there are expectations of incentives for the electric mobility, as part of steps for accelerated decarbonization.

Rota 2030, a policy introduced in 2018, laid out the efficiency and safety requirements for manufacturers. The tax incidence for vehicles (especially alternate fuels and hybrids) were proportionately competitive on achievement of required standards. There have been three five-year cycles completed under the Rota 2030 policy, with each cycle of standards and commensurate fines and incentives. The experience shows that the results of this policy have been restricted to the premium segment of hybrid and electric vehicle automakers and their product offerings. To be sure, most of the auto manufacturers have been able to reach the standards of this policy. But this came at a higher product cost.

Rota 2030 also provided for certain tax benefits – about a three percentage-point lower tax incidence for the hybrid and flex fuel vehicles. The overall tax burden however remains higher for the electric vehicles due to the higher federal excise tax rates and the state sales taxes. The lack of indigenous manufacturing base also does not help in enabling a lower tax incidence for electric vehicles.

The absence of specific supportive measures at federal level is somewhat being compensated by the local authorities which are keen to promote electric vehicles. Notable examples are of Minas Gerais, Rio de Janeiro, Sao Paulo where electric vehicles are found in relatively higher share than other cities. The city of Rio de Janeiro was the country’s first to have zero-emission garbage trucks. At Sao Paulo, the authorities offer a 50% discount on motor vehicle tax for electric vehicle owners. At Minas Gerais, the government authorities have been actively seeking manufacturing investment due to its endowed lithium resources – the Argentine company Bravo Motors is in the process of starting EV and battery production from 2024.

The focus on scaling up the public charging facilities appears to be rather limited. In Brazil’s current electric vehicle market dominated by the luxury demand segment, most of the charging network focus is on the home-based systems. At the same time, while public investments lag, there appears to be a significant private investors’ interest in capitalizing upon the demand.

Market Opportunity

Brazil’s indigenous auto manufacturing ecosystem provides a suitable environment for electric vehicles and its related production. Importantly, there is traction from the recent entrants and startups in setting up the local manufacturing base. One recent example is that of Voltz, founded in 2017. The company started its electric motorcycle production unit in Manaus, aided by the tax benefits from the local authorities. There are similar examples in auto technology startups such as Mileto producing electric motorcycles and minitrucks and seeking an entry in the passenger vehicles’ space.

For some time, the Chinese automakers have been making a foray in the Brazilian market to tap into the electric vehicle demand. Besides a better business environment, such investments are also finding support through local government incentives. In November 2022, BYD marked the market entry with two product launches and a plan to commence local manufacturing from 2024. The local province offered incentives for BYD, which last till 2032. In January 2022, a large ticket-size investment announcement came from the Chinese automaker Great Wall Motor. The company has planned a $1.2 billion investment over the decade to set up electric and hybrid vehicle production units in Brazil, to serve as Latin American export hubs. Many of the leading Chinese auto brands are targeting Latin American markets such? as Brazil’s to serve as the base for eventually catering to the global first tier markets. The country’s recent change in ruling regime bolstered the favourable perceptions.

Local authorities are helping boost the market through their decarbonization measures, as distinct from the federal level. In December 2022 the Sao Paulo government, for instance, banned the diesel-based bus procurement in the city. It forces transport operators to source zero-emission buses for fleet renewal or expansion. By 2024, about a fifth of the city’s bus fleet, amounting to 2,600 buses, is expected to be based on battery electric mode. Such a development also coincides with the local electric bus production announcements of leading automakers, including BYD, Higer, Volvo and Daimler Truck among others.

The inadequate availability of charging infrastructure continues to be a bottleneck in the mass adoption of electric vehicles. In recent times, some of the measures in private sector included automakers, energy service companies and equipment suppliers partnering for charging stations. Key examples include motor company WEG partnering with power company Neoenergia in January 2022, energy company Zlectric partnering with parking facilities network Estapar, and Shell-Cosan venture brand of Raizen to install the charging stations in Shell Energy’s petrol pumping and other outlets. In November 2022, four companies set up a partnership venture termed Rota Sul, for a private network of fast-charging infrastructure across the capitals and key cities of Southern Brazil. The first phase of the capacity addition involves investment of BRL2.4 million.


Brazil’s electric vehicle market outlook is shaped not only by the strong demand momentum but also by other factors such as the competition from ethanol, and flex-fuel options, high import taxes and incentives specifically directed at flex-fuel vehicles. The market is expected to retain it leadership among the Latin American peers, especially as major luxury automakers focus on investments in reinforcing their positions.

Unlike luxury or high-end vehicles, the mainstream adoption of electric vehicles in Brazil will be a long-drawn process. The market lacks a direct purchase subsidy, and the taxation structure ends up raising the price of electric vehicles. The cost barrier will have to be circumvented before electric drivetrain can be an important segment. The expansion in charging infrastructure is a related critical factor in the equation. A limited scale and skewed distribution of charging points will hinder the growth.

Brazil’s unique local characteristics could make the growth trajectory deviate from the typical one observed in other leading European countries. Key factors such as the predominance of the hybrid electric vehicles and the policy focus on biofuels (the country is world’s second largest producer after US) for decarbonization makes pure electric vehicles’ growth less discernible in the outlook. Also notable is the fact that the country’s auto manufacturing base is progressively pursuing development of flex fuel engines that integrate biofuels. Once the scale is achieved, this could be a key differentiator in the global market.