In the industry’s dilemma between ethanol hybrid cars and electric cars, the government today announces the first rules of the new green mobility program
Amidst the dispute between car manufacturers for greater access to subsidies in the country, President Luiz Inácio Lula da Silva and vice president e Minister of Industry, Geraldo Alckminthe announcement of the first rules of the Mover – Green Mobility Programme, launched in December by the government to replace Rota 2030, is being prepared for today.
The auto industry faces a dilemma over what technology will power Brazilian cars in the coming years. If the flexible hybrid, focusing on the use of ethanola renewable fuel used for more than 40 years only in Brazil, or electricwhich brings together discussions on battery recycling and the need to increase the extraction of raw materials, such as lithium
Leading the new stimulus program for the automotive industry, the secretary of Industrial Development, Innovation, Trade and Services of the Ministry of Industry and Commerce (Mdic), Uallace Moreira, says that the government has no preferences for investments in the flexible hybrid sector or electric cars.
This year, the government has reserved R$3.5 billion from the Budget to offer in the form of tax exemptions to the automotive industry, a value that will reach R$19.3 billion by 2028. “Our role is to encourage investment in paths that favor decarbonisation. Mover is neutral with respect to the technological path. It is up to companies to decide, it is not the government that will say: ‘Produce (cars using) ethanol’. The government promotes all paths technologies, companies that evaluate the possibilities of the market,” Moreira said in an interview with Estadao.
The world’s largest vehicle manufacturers, such as China, the United States and Europe, have already opted for electric models, due to a lack of options to meet decarbonization standards. In Brazil, the eighth manufacturer on the list, most automakers lean toward the flexible hybrid, which uses an electric motor and a combustion engine, which can be fueled by ethanol or gasoline.
According to Moreira, in the evaluation of the granting of credits for the installation of new production units in Brazil, this technological issue will not be taken into account, even if he admits that there will be a differentiation in the incidence of the tax on industrialized products (IPI).
By launching Mover, the government underlined that it intends to tax the cars that pollute the most, but the establishment of five variables to quantify this raises doubts in the automotive sector. Moreira said that because flexible hybrids emit less CO2, they would have a greater comparative advantage. But he also admitted that electric vehicles will have an advantage in the short term, when the level of pollution from the production of vehicle components will not yet be included in the calculation.
Source: Terra
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