AUTONEWS

In Brazil, a company that invested in hybrid vehicles comes out ahead with the government program, analysts say

Companies that have invested in hybrid vehicles, especially Toyota, which already produces cars of this type locally in the country, in the Corolla Cross, Corolla and RAV4 models, will benefit most, initially, from the Green Mobility and Innovation (Mover) program. , created by the government through a provisional measure published on Saturday night, 12/30.

The initiative will cost, in total, R$19.3 billion by 2028 in incentives for automakers that invest in the production of vehicles that reduce greenhouse gas emissions.

This Sunday, the 31st, the vice-president and minister of Industry and Commerce, Geraldo Alckmin, stated that the aim is to encourage local production. Therefore, import rates, which have been zero for electric cars since 2015, and reduced for hybrids, will gradually rise again from January and will return to the full rate, 35%, over three years.

For analysts who follow the automotive sector, knowing who wins and who loses with the announcement still depends on the ordinances and decrees to be released. But, in a first assessment, they claim that electric car importers are defeated, due to the higher fees to bring their vehicles.

This is the case of the Chinese Great Wall Motors (GWM) and BYD, which will start producing hybrid and electric cars from 2024 and will still have to import several models to gain market share until then, in addition to the Swedish Volvo. The American General Motors has also indicated that it has plans to produce electric cars locally in the future.

In Brazil and around the world, the industry is divided over how the transition from gasoline-powered cars to more environmentally sustainable alternatives will take place. On one side, there are the automakers that are betting on a direct migration to electric cars. On the other hand, the focus is on vehicles with ethanol and hybrids.

In a way, with the new program, the government indicated its preferred path. "Ethanol gains prominence", says Murilo Briganti, chief executive of the consultancy Bright Consulting. "Without a doubt, this news is extremely important for the country. Despite the delay in publishing it, Brazil is the first country in the world to adopt the 'well to wheel' methodology for evaluating emissions."

To measure emissions that will guarantee more tax incentives, the program uses the "well to wheel" concept, which, in the case of ethanol, ranges from sugarcane production to fuel consumption. And not from the "tank to wheel", which only counts the pollution emitted by the car.

"Electrified cars have been very strong in recent years. Now, in an initial view, the government has just given a 'twist' to the automakers that imported these vehicles and is trying to make compensation for the automakers that are installed in Brazil", says the economist Raphael Galante, founder of Oikonomia Consultoria Automotiva.

"From today's point of view, still depending on the decrees and ordinances for the reduction of IPI, it is likely that an automaker will benefit greatly from this first phase of the program, which is Toyota. It is the only one that already produces the car electrified with ethanol. Theoretically, it comes out ahead."

In the medium and long term, other automakers may also benefit, but the greatest benefits will be further down the line. “It takes time to change an entire manufacturing line with new components and new tooling to make an electrified car,” says Galante.

Mundoquatrorodas