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.