Brazil
Analysis

Brazil seen to have massive EV potential

Bnamericas Published: Tuesday, November 15, 2022
Brazil seen to have massive EV potential

Brazil has outstanding potential to benefit in the electric vehicles value chain, Enrique Glotzer, energy practise director of consultancy Charles River Associates in London, told BNamericas. 

“Electric vehicles require metals, copper, lithium, and all of these are in Brazil. And biofuels for cars are not as value-added as they could. Aviation could pay more for biofuels,” he said. 

Glotzer said most car manufacturers are investing in electric vehicles and that, once the price gets close to that of combustion vehicles, "it’s over." 

“They are much cheaper to run, require less maintenance and work better,” Glotzer said. 

According to local electric vehicles association ABVE, about 116,000 light electric vehicles are operating in Brazil, including hybrid (HEV), plug-in hybrid (PHEV), and 100% battery electric (BEV) units. Buses, trucks, and very light electric vehicles are not part of the category. 

The Brazilian market for electric vehicles is projected to close 2022 with total sales of 44,000-46,000, which will represent a growth of 25% to 31% in relation to 2021.

Sales in the first 10 months of 2022 reached 38,663 vehicles, surpassing by 10.5% the 34,990 of the whole of last year.

The highlight in the period were the sales of BEVs, which reached 6,831 units, up 41.5% over the total number of BEV vehicles in the entire historical series (4,827) ABVE recorded from 2012 to 2021.

ENERGY OUTLOOK

According to Glotzer, 2023 will be another challenging year due to geopolitical turbulence, mostly associated with the war in Ukraine. “Markets are going to be tight at least until 2025, with a lot of volatility. I wouldn’t expect gas prices to come down too much,” he said. 

This situation affects Brazil, as it is a net gas importer, but the country has relatively favorable conditions, thanks to its large hydro reservoirs, combined with wind and solar power potential. 

However, the country will have to build power transmission infrastructure to insert the additional renewable power into the national grid. 

Not incidentally, the transmission auctions scheduled to be held by watchdog Aneel in 2023 are expected to demand a record investment of 50bn reais (US$9.5bn), the same amount contracted between 2018 and 2022. 

Glotzer said Brazil will also have to invest in smart grid technology and direct part of its renewable energy to local industrial activity, while potentially supplying foreign markets with green ammonia, methanol and fertilizers.

The green commodities can be obtained from the production of green hydrogen, produced with renewable energy. 

“Brazil has a very good combination of high-capacity factor wind and solar, especially in the northeast region,” Glotzer said.

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