Electric cars, motorcycles and trucks are the future of transport in the country — but what obstacles must be overcome for this to become a reality?
It is certain that the future of the Brazilian automobile industry will be powered by electrical energy. What is not yet certain is when this future will become the present, since there are many challenges to be overcome so that we can see more electric cars, motorcycles, buses and trucks traveling through the country's streets and roads.
In 2018, the Energy Research Company (EPE), a public organization linked to the Ministry of Mines and Energy, published a study on electromobility and biofuels to support the National Energy Plan 2050, a document that aims to model growth scenarios for energy supply and demand in Brazil over the next 30 years.
It listed challenges to make the energy transition from the use of fossil fuels to electrical energy in light and heavy vehicles. They were complemented by the Brazilian Electric Vehicle Association (ABVE) to indicate which points are essential for the mass adoption of electric vehicles in the country and evaluate how each of them is (or is not) progressing.
Lower vehicle prices: turning point in 2025?
An electric vehicle or a hybrid (with a combustion and electric engine) is much more expensive than those that burn fossil fuels. The cheapest electric car launched in Brazil until April 2022 is the Renault Kwid, which costs R$ 143 thousand. In this price range, competition with luxury vehicles is great.
There is an expectation that this price will fall, according to Eduardo de Sousa, infrastructure director at ABVE. He explains that 40% of the final price of the electric vehicle corresponds to the cost of the batteries.
A study carried out by Bloomberg New Energy Finance points out that in 2021 the average cost of lithium batteries was US$ 132 per kWh of energy generated — a reduction of 89% compared to 2010. “When the average cost of batteries falls below US$ 100 per kWh, the final price of the vehicle electricity will already be equivalent to that of the similar one using fossil fuel. The turning point should happen between 2025 or 2026”, he says.
Furthermore, he highlights that this initial investment in purchasing the vehicle may be diluted in the maintenance cost. “The investment can be deducted from the fourth or fifth year of use, because the cost per kilometer driven is five or six times lower than that of a gasoline vehicle, and the maintenance cost is 60% to 70% lower, as there are fewer pieces”, he explains.
More charging points: under construction
In order for more electric vehicles to travel around, Brazil needs to have an adequate electrical charging infrastructure, points out the EPE document — which does not go as far as to assess the current state of national infrastructure.
Building a charging network would require an investment of between US$ 1,000 and US$ 2,000 for each vehicle in circulation, according to this text, which cites figures from the International Energy Agency report (IEA, 2010).
ABVE believes that the electrical charging infrastructure market has “advanced at a reasonable pace”. According to the entity's survey, there are 1,250 public and semi-public charging stations in Brazil, not counting the points installed in dealerships and some residential and commercial condominiums. “It is a number compatible with the evolution of the stock of electric cars”, assesses Eduardo, who is also CEO of Electric Mobility Brasil, an electric charging solutions company.
The forecast is that by the end of 2022 this number will rise to 3 thousand, and that by the middle of the decade it will reach 10 thousand charging stations.
According to the executive, in addition to expanding the network, it is necessary to invest in charging stations that offer fast or ultra-fast charging “so that trips are safer and more practical for electric car drivers”.
The diagnosis made by EPE also states that the distribution network needs to be taken to the next level to adapt the supply to the demand for electrical energy. The company suggests, for example, creating incentives for consumers to recharge the vehicle without overloading the electrical system.
Creation of an electromobility policy: an unknown
Another important challenge highlighted by ABVE is the creation of a national electromobility policy, the “ecosystem” of electrification of the vehicle fleet (light and heavy), which comprises manufacturing and the existing infrastructure so that the modal works without anyone stopping in the middle of the street or road due to “lack of fuel”.
A first step was the creation of the federal program Route 2030 (successor to Inovar-Auto). Eduardo recognizes the importance of the initiative — especially the reduction in the Tax on Industrialized Products (IPI) rates for trams and the adoption of the concept of energy efficiency for vehicles —, but in his opinion more needs to be done.
According to him, only a national strategy that integrates incentives spread across cities and states into a long-term program will give “horizon” to companies and investors and convey confidence to buyers of electric vehicles. “Today, we still don’t know where Brazil wants to go with electromobility”, he states.
