BRASÍLIA – The organization of the guest table for the presentation of first rules of companies joining the To movethe new government stimulus program for automotive sector, was already a sign of the division that exists in the industry today. On one side of the table, set up in one of the halls of the Palácio do Planalto, was the National Association of Vehicle Manufacturers (Anfavea), which brings together the largest combustion car manufacturers in the country. On the opposite side, the Brazilian Electric Vehicle Association (ABVE).
“I believe that Brazil is able to take advantage of these lessons with the renewable energy that we have – and, who knows, we can seek to take a leap forward in our industry,” said Bastos. “The objective is Brazil, but it is also exporting. Brazil needs to renew a model that it already was and still is, but we need to enter this new technological route, this transformation of the automotive industry.”
He was followed by Márcio Lima, president of Anfavea: “Brazil is an eclectic country. There will be a decarbonization route through biofuels, with ethanol, with pure electricity. We will have all the routes to decarbonization.”
The automotive industry is currently facing the challenge of investing either in electric cars or in the production of hybrids that maintain a combustion engine. Automakers in the United States and Europe have already defined electric vehicle production as a growth route, due to lower greenhouse gas emissions from automobile consumption. In Brazil, the discussion took on new contours due to the political and economic power of ethanol.
Behind the scenes and in public, Lula government authorities have already shown a preference for Brazil to develop electric cars, but give priority to hybrids (which combine electricity and combustion) with flex engines. Only Toyota currently manufactures vehicles with this feature, and the challenge is to invest in a technology that is unlikely to have a market outside the country, reducing potential economies of scale for manufacturers.
“Next year, we will have been in ethanol for 50 years; we are the second country that produces the most. And this is a car that will have much more autonomy, the hybrid car, which will bring ethanol, will be more efficient, especially from the tank to the wheel”, stated the president of BNDES, Aloizio Mercadanteduring the event.
In the audience were high-ranking executives from all the automakers installed in the country, from the traditional Stellantis (Fiat, Jeep), GM and Volkswagen to those that became notable for gaining market share with the sale of pure electric vehicles, such as the Chinese GWM and BYD. The presence of the president of the Sugarcane and Bioenergy Industry Union (Unica), Evandro Gussi, was also recorded. At the table, besides the president Luiz Inácio Lula da Silvawere the vice Geraldo Alckminand ministers Rui Costa (Civil House), Fernando Haddad (Finance) and Renan Filho (Transport).
But it was the speech by trade unionist Moisés Selerges Júnior, from the ABC Metalworkers Union, President Lula’s political birthplace, that caught the executives’ attention. Not only because of the influence of the union movement on the PT government, but also because of the connection it made with the creation of jobs in the sector.
“There is a lot of talk about electric cars and other energy sources. We defend that the face of Brazil is the ethanol hybrid. We invest heavily in this technology because we believe it is the best for Brazil”, said Moisés. “China has invested in the electrification of vehicles, as said here, and we think that (the flex hybrid) be the best way (for Brazil). Do companies have employment targets? We know that if we compare a combustion engine with an electric engine, the number of parts is 60% smaller (on electric).”
The metallurgist’s concern is that the less sophistication of an electric motor will generate extra unemployment in a sector that has been evolving rapidly in the introduction of robots on assembly lines. The adverse effect of electrical manufacturing on jobs in the sector has already stopped factories in the United States.
To the Estadão, Ricardo Bastos, from ABVE, responded to Moisés’ argument: “It’s as big a mistake as saying that producing cell phones is bad because keeping a pay phone on every corner uses more plastic”, he says. “Electric cars have fewer parts, but their production costs are falling and access will increase. The combustion car is the opposite: the cost of producing it is growing.”
“If Brazil does not participate in this technology”, says the executive, “who will Brazil export to?”
The industry, however, has already understood the government’s appeals and has moved to set up production lines for hybrid models with flex engine. Even the Chinese companies GWM and BYD mobilized, even though the latter is now just an importer.
The forecast is that BYD, which chose to establish itself in Bahia, will only reach the level of manufacturer, with the same level of content manufactured in the country as its competitors, at the end of the current automotive program, in 2028.
Márcio Lima, from Anfavea, predicts that in two years there will be more flex hybrid production units in the country. “Some automakers are anticipating, the consumer is the one who makes the choice. It has called out to the market and automakers are responding,” he said.
Consumer decision
Lima states that Brazil, unlike the United States and Europe, decided to leave the choice for the winning technological route to the consumer. This should make companies try to balance between the two paths, offering both flex hybrids and pure electrics.
“We will have all technologies available”, said the president of Anfavea. “The electric car is not the villain of anything, it just has to adjust to the Brazilian reality. Brazil still has infrastructure problems, the price is still much higher than that of a combustion car. Consumers who have more resources and limited use and want new technology are turning to electric cars. Those consumers who need to change cars and don’t even have the infrastructure are going for hybrid or flex combustion.”
According to him, even though it seems like an investment that will be restricted to the Brazilian market, the flex hybrid could be adopted abroad, even if this has not happened with current flex vehicles.
“Who will supply India? United States, Europe there are 60 million consumers who are taking the electric route. And the other 20 million? Who will supply this market for the next 20 years? Brazil has great capacity.”
Tags: Duel hybrids electrics invades Planalto launch rules automotive sector
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