Electric vehicles are capturing the attention of both the public and the market for their potential to reduce the environmental impacts caused by traditional cars, as well as to lower maintenance and charging costs.
Major players in the automotive industry are making heavy investments in innovations and technologies that are increasingly winning over consumers looking for modern, sophisticated, and immersive vehicles. Demand for this kind of experience is strong in Brazil and worldwide, but in Brazil the momentum is still limited—mainly due to the high costs of importation and sales—though that is a scenario that may be about to change.
Promising Brazilian outlook
A new bill currently in Brazil’s Senate proposes eliminating the import tax on electric and hybrid vehicles, which could reduce car prices by up to 20%. The proposal envisions bringing the rate down to zero by December 2025, with a gradual rollout across the Brazilian market.
This reflects broader projections for vehicle electrification in Brazil. According to data from the study “The Path to Decarbonizing the Automotive Sector,” conducted by the National Association of Motor Vehicle Manufacturers (Anfavea) and Boston Consulting Group (BCG), electric and hybrid vehicles are expected to account for between 12% and 22% of new registrations in Brazil by 2030.
Volvo, one of the segment’s leaders, became the first brand to sell more than 500 electrified cars in a year in Brazil, strengthening its position as a benchmark for quality and innovation. Chinese giant BYD entered Brazil with an ambitious plan to open 45 dealerships by the end of the year, reflecting the market’s potential. In the first quarter of this year, EV sales in Brazil rose by 115%, according to the Brazilian Electric Vehicle Association, totaling nearly 90,000 vehicles sold. Small steps—but increasingly steady ones.
Electrification is also an ally of the environment
There is a clear pathway to reduce CO₂ emissions from passenger cars in operation. A recent analysis by the International Council on Clean Transportation (ICCT) stated that switching from internal combustion vehicles to electric vehicles would reduce total life-cycle CO₂e emissions by around 65% based on today’s average European electricity mix—and by 83% with fully renewable (“green”) electricity.
As electricity supply continues to evolve and green charging for a larger EV fleet becomes viable, materials and manufacturing will become the dominant sources of emissions across an EV’s life cycle. Today, producing an electric vehicle results in an emissions intensity nearly 80% higher than that of a traditional car, mainly due to the battery and the vehicle’s greater use of aluminum.
Auto parts and components market in motion
The automotive industry’s shift toward electrification will transform the entire supply chain and drive a significant change in the size and structure of the automotive components market.
Critical parts for electrification—such as batteries and electric drivetrains—and for autonomous driving—such as light detection and ranging (LiDAR) sensors and radar sensors—are expected to account for about 52% of the total market size by 2030, according to a McKinsey study.
What to expect?
As we said, the outlook for EVs in Brazil is indeed promising and optimistic, even though the market is still in its early stages on the path toward broader adoption. High prices are, in fact, one of the main reasons behind the seemingly slow development of Brazil’s electric car market, but other factors also need to be considered.
One of them is the lack of widespread charging infrastructure. After all, no one wants to end up stranded on the road due to a lack of “fuel.” Although electric cars can offer a certain driving range, having the reassurance of accessible charging stations is essential—especially for long trips or for people who travel frequently. In European countries and in the United States, major initiatives are already addressing this issue.
Shell, through Ubitricity, announced a plan to install 50,000 charging stations across the United Kingdom by the end of 2025. In addition, the companies developed specialized hardware that can be attached to public streetlight poles, expanding charging infrastructure for the broader population.
From a structural perspective, it is possible for Brazil to build a foundation for growth—and with the right financial incentives, there is reason to be optimistic about the future of electric cars.
