Vehicle Electrification in Brazil: Technological Trajectories and Impacts on the Automotive Sector

Résumé:

The intensification of climate change and the need to reduce greenhouse gas (GHG) emissions have positioned vehicle electrification as a central decarbonization strategy, especially in countries where transportation plays a relevant role in emissions, such as Brazil. Within this context, this research analyzes the potentialities and limitations of technological trajectories for the electrification of passenger vehicles in the Brazilian scenario. This exploratory and documentary study presents the historical conditioning factors, examines current institutional contexts at international, national, and sectoral levels, and discusses the potential technological trajectories for Brazilian electrification. The assessment of scenarios was synthesized through SWOT matrices: one trajectory directed toward battery electric vehicles (BEV), another oriented toward hybrid electric vehicles (HEV), and a scenario of technological coexistence. The results indicate that each trajectory entails distinct impacts on emissions, productive structure, and competitive positioning, demonstrating that the technological choices adopted will directly shape the pace, depth, and direction of transformation of the Brazilian automotive sector.

Texte complet:

Purpose
The intensification of climate change and the need to reduce greenhouse gas (GHG) emissions have placed vehicle electrification at the center of global decarbonization strategies, especially in countries where transportation is a major driver of emissions. In this context, Brazil faces a crucial moment as it seeks to align the main propulsion technology of vehicles with climate goals while having a complex institutional, technological, and productive landscape.
This research aims to analyze how different technological trajectories for the electrification of passenger vehicles may shape the Brazilian automotive sector. Based on the elaboration of three SWOT matrices, the study examines the main alternatives available: (i) a trajectory led by battery electric vehicles (BEVs), (ii) a trajectory centered on hybrid electric vehicles (HEVs), and (iii) a scenario of technological coexistence among BEVs, HEVs, and internal combustion engine vehicles (ICEVs).
The objective is to understand the structural implications, opportunities, and constraints associated with each pathway. By investigating the historical drivers of the current energy transition, the institutional and market conditions in Brazil and globally, and the technical foundations of the competing technologies, the research identifies how alternative trajectories may influence emissions, industrial capabilities, and the competitive positioning of the national sector.

Methodology
The study adopts a qualitative, exploratory, and documentary approach, made by a comprehensive review of academic literature, sectoral reports, and official policy documents.
Key sources include publications from international institutions, such International Energy Agency (IEA), International Council on Clean Transportation (ICCT), and Intergovernmental Panel on Climate Change (IPCC), besides Brazilian policies including Proconve, RenovaBio, Rota 2030, the Combustível do Futuro law, and the MOVER program. Sectoral data from Anfavea, Sindipeças, BCG, and BloombergNEF complement the institutional analysis by providing insights about vehicle sales trends, the technological composition of the national fleet, investments in electrification, and the evolution of electric‑vehicle adoption in both Brazil and major global markets.
The methodology consists of constructing SWOT matrices for each of the three technological trajectories. This analytical tool captures the internal strengths and weaknesses of the Brazilian automotive sector, as well as the external opportunities and threats set by global technological shifts, national energy characteristics, and policy directions.
By overlapping historical trends, technological features, and institutional dynamics, the matrices synthesize how each trajectory may reshape the automotive sector, the required competencies, and the expected environmental outcomes.

Findings
The analysis shows that a transition oriented toward BEVs offers the highest potential for long‑term GHG mitigation, aligned with the targets set at the Paris Agreement. This is reinforced by Brazil’s largely renewable electricity matrix. The simplification of vehicle architecture in BEVs may reduce manufacturing complexity and long‑term costs. Global trends, marked by falling EV prices and consolidated leadership from countries such as China, also strengthen this trajectory, despite recent setbacks from traditional carmakers in the US and Europe. However, the sector faces significant internal weaknesses: technological gaps in key components (batteries, power electronics), dependence on imports, limited charging infrastructure, and consumer skepticism regarding autonomy and safety. The current industrial path dependence toward hybrids further reduces momentum toward BEVs. Opportunities include catching up technologically the developed countries by integrating the domestic electronics industry into the EV market. Threats involve potential industrial disruption, increased vulnerability to international competition, and uncertainty due to inconsistent policy signals.
A trajectory centered on hybrid vehicles represents a gradual transition, preserving existing industrial capabilities, supply chains, and fuel infrastructure currently based on flex fuel technology. HEVs require less structural change, reduce investment risks, and align with Brazil’s strong ethanol sector. When combined with biofuel use, hybrids can achieve significant short‑ and medium‑term emission reductions. The findings highlight that most automakers operating in Brazil already favor HEV production, reflecting lower technological disruption and compatibility with national energy conditions. Nevertheless, the environmental benefits of HEVs are limited relative to BEVs and still insufficient to meet long‑term decarbonization targets. Prioritizing HEVs may constrain Brazil’s insertion into global value chains dominated by full electrification and reduce opportunities for technological advancement. Additionally, the environmental gains depend heavily on consumer adoption of ethanol, currently far from universal.
A scenario of technological coexistence between BEVs, HEVs and ICEVs offers flexibility and allows the gradual integration of BEVs while maintaining the current productive base. It reduces risks by avoiding a single technological bet and enables regional adaptation, applying HEVs where charging infrastructure is scarce and BEVs in urban centers. Opportunities include synergy between electricity and biofuels, progressive consumer adaptation, and potential collaboration among automakers. However, coexistence also prolongs the circulation of higher‑emission vehicles, complexifies governance, increases infrastructural fragmentation, and risks diluting investments. It may also delay emission reductions and weaken Brazil’s competitiveness in the global automotive market by reducing focus on a specific technological direction.

Significance
The study highlights that each trajectory carries distinct industrial, environmental, and strategic implications. BEVs enable alignment with global decarbonization trends and higher value‑added technological development but require deep industrial restructuring and coordinated policy support. HEVs capitalize on existing Brazilian advantages and minimize structural disruption yet risk technological obsolescence and insufficient emissions reduction. Coexistence represents a pragmatic short‑term compromise but may hinder long‑term clarity, reduce scale, and prolong Brazil’s peripheral position in global automotive chains.
Across all scenarios, the central implication is that the lack of clear national guidance imposes uncertainty on firms and may prevent the sector from seizing opportunities generated by the rapid global restructuring of automotive technologies.
The research concludes that establishing a coherent strategic direction, whether disruptive or incremental, is essential for Brazil to transform the energy transition into a catalyst for industrial and technological development.