Industry Trend Analysis - Opportunity For Brazil To Become An EV Production Hub - MAR 2018
BMI View: Brazil has all the components necessary to become a major EV production hub as it is in close proximity to lithium supplies and future battery producers and has an established automotive industry with a favourable labour market. While Brazil will face logistic and trade challenges they could be mitigated in the longer term.
We believe that Brazil is well positioned to become a future globally competitive electric vehicle (EV) production hub, as the country benefits from its strong labour market dynamics, a large and growing domestic and regional consumer base, and strengthening logistical appeal. In 2017, EV sales in Brazil increased 202.1% to 3,296 units, following a 29% increase in 2016 to 1,091 units which highlights the growing demand for EVs. Although volumes remain small, the pace at which EV sales are growing highlights significant domestic opportunities for EVs in the longer term as consumers continue to warm to the technology. Furthermore, the Brazilian government is considering the implementation of EV incentives that will see a significant tax cut on EVs, which presents a large upside risk to the domestic EV market.
Favourable Market Characteristics
|EV Sales Gaining Momentum|
|Brazil - Electric Vehicle Sales|
|Source: NFAVEA, BMI|