The Brazil Electric Vehicles Market is expecting steered growth through increased middle-class population, rise in fuel prices, increased charging stations Infrastructural Development and government incentives.
Story outline
- Increased Number of charging stations in the country leading to the evolution of the Brazil EV Market.
- Rising gasoline costs in Brazil, reaching $1.17/L in June from $1.05/L in May 2023, are driving interest in electric vehicles (EVs) due to their potential for long-term fuel savings. As oil prices surge, buyers are shifting towards EVs for stability.
- Increased middle- class up to 47% is leading to a rise in demand of electric vehicles, which is helping Brazil EV Market to grow.
- With the help of government policies and initiatives, consumers are able to purchase EVs in Brazil that leads to increased use of electric vehicle in the country.
The Brazil EV Market which is expected to grow at a CAGR of 17% in the forecast period 2023-2028, is being driven by through increased middle-class population, rise in fuel prices, increased charging stations Infrastructural Development and government incentives.
1. Increasing numbers of charging stations, helps to grow the electric vehicle market in Brazil.
Brazil having the most charging points of electric vehicle in whole Latin America, as of 2023, the country has 50,000 charging points, compared to 3,000 in 2020.
In Brazil, there are various type of charging stations for electric vehicles including, such as Level 1 9110v), Level 2 (220V) and DC fast chargers (DCFC). As of 2022, the larger majority of electric vehicle charging station connectors in Brazil were Type 2, with a total of 308 plugs resisted.
Brazil provides fast charging features like, in 2023 over 60% of total charging stations are equipped with DC fast-Charging technology, allowing EVs to recharge up to 80% of their battery capacity in under 30 minutes. This focus on high-speed charging that led to encourage more people to adopt for electric vehicles.
2. Due to increase in fuel price in Brazil, the demand of electric vehicle is on the rise in the market.
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Gasoline Prices in Brazil increased around 1.17 USD/Liter in June from 1.05 USD/Liter in May of 2023.Consumers in Brazil are more attracted to the electric vehicle because it has the potential to reduce long- term fuel cost, which makes them more cost-effective option against to traditional gasoline- powered vehicle in market.
In Brazil, the consumption of gasoline is continuing to increase in 2023 and 2024, mostly due to expansion of farming sector and the use of mobility cars in the country. In 2023, the demand of diesel is expected to grow 1.8% in the market.
As a result, hike in price of oil in the market, encourage buyers switch to electric vehicle and encourage to adopt EVs in Brazil. And compared to traditional fuels, the cost of energy in electric vehicles are stable and predictable.
3. Rise in middle class population in Brazil is becoming the reason for the growth of electric vehicle market.
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The rise of middle- class population in Brazil has led to increase in car ownership. In 2021 the traditional middle class was around 47% in Brazil. And now as middle- class population grows, with the annual rate of 0.8% the no. has increase up to 87% in 2023.
With the increasing no. of middle class, just about 10% of the population holds 43% of Brazil’s whole income. The average per- capita household income in Brazil is approx. $38 per month. This shows the purchasing power of people in Brazil.
Brazil’s rising middle- class population has contributed significantly to growth of the electric vehicle market. As more people enter the middle class, their purchasing power increase, making electric vehicle a reasonable option. The desire for sustainable transportation option, coupled with the increasing affordability of electric vehicle, has led to a surge in demand.
4. Over the years Brazil’s government introduce policies and take initiatives to promote electric vehicle that helps in growing the market.
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Multiple government incentives in Brazil have led to a significant increase in electric vehicle (EV) sales, with registrations tripling and charging stations expanding.
In 2018, Brazil government Import tax for EVs that is, Resolution 97/2018 of CAMEX (Executive Secretariat of the Foreign Chamber of Commerce), and added electric vehicles to the Brazilian List of Exceptions to the MERCOSUR Common External Tariff. Import taxes for EVs have been reduced from 35% to 0%.
A law pass by Brazilian govt. in 2022 that forbids the entry of fossil fuel-powered cars and demands a 100% electric vehicle by 2028. This will be making EVs more accessible to customers, encouraging their adoption, such as tax reductions and subsidies, are helping to grow the market for electric vehicles.
Brazil’s constitution and justice commission CCJ approved a bill aimed at prohibiting the sale of new petrol and diesel-powered cars in the country as of January 2028. Thus, only electric vehicles and those that run on bio energy such as ethanol would be permitted. The bill also includes the prohibition of all petrol and diesel-powered vehicles on roads starting in next 5 years.
As a result, the Brazil electric vehicle Market is directly benefitted because of different types of government policies and initiatives.
Conclusion
The Brazil EV Market is growing at a considerate level with the help of its type of EVs (2-wheeler and 4-wheeler). Expecting growth with a CAGR of 17% the Brazil EV Market is ready to gain more benefits from increasing middle class population, a high rise in fuel prices, increasing no. of charging stations and support of the government to promote electric vehicle in the country.
