Brazilian EV market to rocket
The firm’s research shows the immense potential for growth in the country's EV and supporting infrastructure market if automakers decide to invest in it and once automotive companies overcome challenges, such as high initial costs, by deploying new business models and leveraging the anticipated import tax relief.
The report finds that the country had just 125 EVs in operation in 2012, chiefly for R&D and marketing. By 2017, this is expected to reach 5,700 units through imports, driven by import tax reliefs.
Frost & Sullivan adds that Brazil's EV and supporting infrastructure market presents two main issues. One is the high acquisition costs; final EV price is two to three times higher in Brazil than in European countries due to the impact of taxes and the huge capital required to implement EVs. Another challenge takes the form of the lack of regulations determining how energy for recharge stations will be commercialised, especially for private companies, as only nationalised energy utilities have the permission to manage energy in Brazil.
The firm says that acknowledging the global EV and recharge stations trend, automakers should prepare for the imminent sustainable vehicle demand as energy utilities have already initiated their investments in R&D. The time is ideal for the introduction of new business models and lobbying with the government for support in terms of regulations and incentives.
‘Several energy companies are investing in R&D and acquiring EVs for the development of EV infrastructure such as recharge stations, in order to be better prepared if automakers decide to begin operations in Brazil,’ said Frost & Sullivan automotive & transportation research analyst Vinicius Vargas. ‘Supplying these vehicles would mean large revenues and a new market. In fact, partnerships are open and new projects are expected to be launched in the next few months.’For more of the latest industry news, click here.