THEINTERNATIONALOUNCIL

NCEANTRANPRTATION

icct

JUNE2025

Thetransitiontoelectric

vehiclesinBrazil’sautomotiveindustryanditseffectson

jobsandincome

ANDRéCIEPLINSKI(ICCT),PEDROROMEROMARQUES(MADE/USP),ANDLUIZANASSIFPIRES(MADE/USP&IE/UNICAMP)

Supportedby

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LEGALNOTICE

ThedesignationsemployedandthepresentationofthematerialinthispublicationdonotimplytheexpressionofanyopinionwhatsoeveronthepartoftheSecretariatoftheUnitedNationsconcerningthelegalstatusofanycountry,territory,orcityorareaoritsauthorities,orconcerningthedelimitationofitsfrontiersorboundaries.

Mentionofacommercialcompanyorproductinthisdocumentdoesnotimply

endorsementbytheUnitedNationsEnvironmentProgrammeortheauthors.Theuseofinformationfromthisdocumentforpublicityoradvertisingisnotpermitted.Trademarknamesandsymbolsareusedinaneditorialfashionwithnointentiononinfringementoftrademarkorcopyrightlaws.

TheviewsexpressedinthispublicationarethoseoftheauthorsanddonotnecessarilyreflecttheviewsoftheUnitedNationsEnvironmentProgramme.Weregretanyerrorsoromissionsthatmayhavebeenunwittinglymade.

TheInternationalCouncilonCleanTransportationisgratefultotheCruxAllianceforprovidingfinancialsupportforthisresearch.Thisseriesoftechnicaldocumentswasdevelopedwiththeco-financingsupportoftheEuropeanUnionwithintheframeworkoftheEUROCLIMAProgramandwiththesupportofACCIONA.

ACKNOWLEDGMENTS

TheauthorsthankBenjaminBradlow,SebastianGalarza,andananonymousreviewer;ourICCTcolleaguesAaronIsenstadt,AnaBeatrizRebou?as,AnhBui,CarmenAraujo,DanRutherford,EamonnMulholland,HarsimranKaur,LeticiaPineda,MarcelMartin,

andOscarDelgado;andJoneOrbea,LuisFelipeQuiramaLondo?o,RenataFreitas

ChamarelliMac-Culloch,andVitorLealPinheirofromUNEPforreviewingthisreport.Theirreviewsdonotimplyanendorsement,andanyerrorsaretheresponsibilityoftheauthors.

EditedbyTomásFranciscoHusted

InternationalCouncilonCleanTransportation

1500KStreetNW,Suite650

Washington,DC20005

communications@

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|@TheICCT?2025InternationalCouncilonCleanTransportation(ICCT)(ID397)

CRUX

ALL工ANCE

EXECUTIVESUMMARY

TransitioningBrazil’sroadvehiclefleettobatteryelectricvehicles(EVs)hasthepotentialtocombinethedevelopmentofanewdomesticindustry,bothinvehicleassembly

andbatterymanufacturing,withsubstantialreductionsingreenhousegasemissions.

EstablishedbyLaw№14.902,inJune2024,theGreenMobilityandInnovationProgram(MOVER,fromProgramaMobilidadeVerdeeInova??o),whichregulatesvehicle

emissionsandprovidesincentivesforproducinglow-emissionvehicles,hastriggeredtheannouncementofanunprecedentedroundofinvestmentsintheBrazilianautomotive

industry.GiventhehistoryofBrazil’sproductionofbiofuels,whichrepresentoneoftheprimaryenergysourcesforcombustionenginevehiclesinthecountry,MOVERenvisionsthedecarbonizationofroadtransportationbasedonthecoexistenceEVsandbiofuels.

ThedevelopmentofanationalEVindustrywilldependonitscapacitytocreate

high-qualitynewjobsandtofostertheexpansionofadomesticindustryformain

componentssuchaselectricmotorsandbatteries.Evaluatingthejobandincome

creationpotentialfromtheproductionofEVsiscomplexandrequiresacomprehensiveanalysis.Analyseswithaspecificsectoralfocusthatconsideronlytheproductionof

vehiclesandautoparts,forexample,ignorethatthevastmajorityofnewjobscreatedstemfromchangesthroughoutthewholeproductivestructureoftheeconomy.In

otherwords,theeconomicimpactsdependonthedirectproductionofvehiclesand

thesectors(suchasautopartsandtires)thatdirectlysupplyinputstotheautomotivevaluechain,inadditiontothesectorsthatsupplygoodsandservicestothelatter.Forexample,thesaleofanEVrequirestheproductionofitsbattery,andthatrequiresbothresearchanddevelopmentservicesandrawmaterials.

ThisreportdevelopstwodistinctscenariosfortheevolutionofBrazil’snationalvehiclefleetuntil2050.Theaimistocomparetheeffects,onthelevelofjobsandincome,

ofanambitiousincreaseinEVs(theElectrificationscenario)withascenarioinwhichcombustionvehiclesdominatesalesuntil2050(theBaselinescenario).Thetwo

scenariosconsidertheproductionoflight-andheavy-dutyvehicles,dividedintofivesegments:passengercars,lightcommercialvehicles,medium-dutytrucks,heavy-dutytrucks,andbuses.

Toestimatetheeconomicconsequencesofremodelingthevehiclefleet,wechoseto

useaspecificmethodology—aninput-outputanalysis—thatallowsustoconsiderthe

linksbetweenallsectorsofaneconomyandidentifytheimpactsofpotentialchangesinitsstructure.AsyntheticsectorrepresentativeoftheEVindustrywasincludedintheBrazilianinput-outputmatrixinordertospecifythegoodsandservicesrequiredby

thisindustry.Thissyntheticsectorenablesanassessmentoftheeffectsgeneratedbychangesindemandforitsfinalgoods:lightandheavyEVs.

Thisreportthenassessestheimpactsonemploymentandincomefromtheproductionofvehiclesandfromtheassociatedconsumptionoffossilfuels,biofuels,andelectricity.Todothis,weestimatetheevolutionofsalesofvehiclesproducedinBrazil,fuel

demand,andelectricitydemandandthenconverttheresultsintomonetaryvaluethatisusedtoprojectthegrossvalueofproduction,thevalueadded(thesumofwages

andprofits),andthenumberofnewjobscreatedbetween2019and2050inboth

theBaselineandElectrificationscenarios.Jobsrelatedtovehiclemaintenance,theproductionofspareparts,andelectricaldistributionandcharginginfrastructureforEVsarebeyondthescopeofthisanalysis.

FigureES1summarizesourresults.Theleftpanelshowstheevolutionofthetotalnew

jobspotentiallycreatedfromthesaleofEVs,fuels,andelectricityintheBaseline(brown)andElectrification(blue)scenarios.Thetwopanelsontherightillustratethedistributionofjobscreatedattheendofthesimulations(in2050)bysectorandgender.

iICCTREPORT|BRAZIL’STRANSITIONTOELECTRICVEHICLESANDITSEFFECTSONEMPLOYMENTANDINCOME

iiICCTREPORT|BRAZIL’STRANSITIONTOELECTRICVEHICLESANDITSEFFECTSONEMPLOYMENTANDINCOME

FigureES1

EvolutionanddistributionofnewjobscreatedintheBaselineandElectrificationscenarios

TotaljobscreatedDistributionofjobsin2050

2.5

2.0

1.5

Millionjobs

1.0

0.5

0.0

-0.5

Electri?cationscenario-50%domesticbatteryproductionBaselinescenario

2019202420292034203920442049

+116%

67.8%

32.2%

55%

45%

66.5%

33.5%

BaselineElectri?cationBaselineElectri?cation

SectorGender

BatteryelectricvehiclesManufacturing-

electric

Manufacturing-otherElectricityandgas

Services

Construction

Transportation

Agricultureand

extractiveindustries

Combustionengine

vehiclesandautoparts

Men

Women

THEINTERNATIONALCOUNCILONCLEANTRANSPORTATIONTHEICCT.ORG

Theresultsshowthat,assuminglaborproductivityandtheamountofinputs

requiredforproductionremainfixedatcurrentlevels,theElectrificationscenario

wouldgeneratemorethantwiceasmanyjobsastheBaselinescenarioby2050,

thankstomoreambitioustargets.ThispotentialforjobcreationisduetoanincreaseinaggregatedemandthatresultsfromgrowthinEVsalesandtheexpansionofthe

domesticproductionofautomotivebatteries.TheElectrificationscenarioestimates

anotableexpansionofindustrialjobs,bothinEVmanufacturingandinother

manufacturingindustries.Thisisespeciallytrueofelectricalmachineryandequipmentmanufacturing,whichincludesbatteriesandelectricpowertraincomponents.Ontheotherhand,theElectrificationscenarioestimatesanabsolutereductioninjobsinthe

productionofcombustionvehiclesandarelativereductioninjobsintheproduction

ofautopartscomparedwiththeBaselinescenario.TheElectrificationscenarioalso

projectsmoderatereductionsinthefuels,biofuels,andagriculturesectorsrelative

totheBaseline.Thelargestjob-creationpotentialinbothscenariosisinservices,a

categorycomposedof23relativelylabor-intensivesectorsthattogetheraccountedfor64%ofalljobsinBrazilatthestartofthesimulations(2019).

Inbothscenarios,assumingthecurrentgenderdistributionofjobsineachsector

remainsfixeduntil2050,abouttwo-thirdsofnewjobswouldbeoccupiedbymen.

Thisisamoreunequalgenderdistributionthantheoneobservedforthetotal

Brazilianeconomyin2019,when60%ofemployeesweremen.Thisismainlydueto

theexpansionofsectorsthatcurrentlyemploymostlymen,suchastheproduction

ofelectricandcombustionenginevehicles(inwhichmencomprise89%ofthe

workforce),trucktransportation(83%),electricalequipmentmanufacturing(71%),andothertypesofmanufacturing(70%).

iiiICCTREPORT|BRAZIL’STRANSITIONTOELECTRICVEHICLESANDITSEFFECTSONEMPLOYMENTANDINCOME

Thesimulationsalsoevaluatedchangesinthedistributionoflaborincomeandprofits.Theshareofwagesandincomegeneratedbyvehicleandfuelsalesishigherinthe

Electrificationscenario(53%)thanintheBaselinescenario(45%)astheexpansionofEVproductionresultsingreaterdemandforgoodsandservicesfromsectorswith

higherwages.

TheinternationalcompetitivenessofBrazil’sautomotiveindustryalsoplaysakeyroleintheresults,asobservedinoursensitivityanalyses.ByreplicatingadecliningexportstrajectoryintheElectrificationscenarioequaltotheoneassumedintheBaseline

scenario,thenumberofjobsgeneratedintheElectrificationscenarioisreducedby

14%in2050.ThismeansthatthenumberofnewjobscreatedintheElectrification

scenarioonlysurpassestheBaselinescenarioafter2032.Still,evenwhenconsideringadeclineinexports,88%morejobsarecreatedintheElectrificationscenariothanintheBaselinescenario.

ConsideringthecurrentcontextofBrazil’snationalautomotiveindustry,anditspositioninthetransitiontozero-emissionvehicles,thisanalysissupportsthefollowingconclusions.

Establishingmoreambitiouscorporate-averagevehicleemissionreductiontargetsandintroducingindustrialpoliciestodevelopthenationalproductioncapacityfor

keyEVcomponents,especiallybatteries,couldbepartofaneffectivepolicymixtosupportEVproduction.ThenewMOVERprogrampresentsopportunitiestosetmoreambitiouscorporatevehicleemissionsreductiontargetsandstimulatetheBrazilianEVindustry.SettingmoreambitiousemissionreductiontargetsthanthoseimplementedinthelastcycleoftheRota2030programhasthepotentialtodirectinvestmentstowardEVproduction.IncreasingthescaleofEVsalesanddomesticproductioncan,inturn,supportthecompetitivedomesticproductionofkeyelectricpowertraincomponents,especiallybatteries,increasingthedomesticcontentofthesevehicles.

Strengtheningexport-promotionpoliciestoleveragetheproductionoflow-

emissionvehiclesinBrazilcanhelpmitigatetheimpactsofthetransitiononexportsandstrengthenBrazil’scompetitivenessinthelongterm.Fleetelectrification

targetsinsomeofBrazil’smainvehicleexportdestinations,suchasChile,Colombia,andMexico,putcurrentBrazilianexportsofcombustionenginevehiclesatrisk.On

theotherhand,thegrowthofEVdemandinLatinAmericaandtheavailabilityof

lithiumandotherrawmaterialsintheregioncanbenefitBrazilianexports,especiallytomarketswithoutdevelopedautomotiveindustries.Thegovernmentcouldconsiderexportfinancinginstruments(tradefinance),exporttaxincentives,andfinancial

assistanceinforeignmarkets.Incontrast,acontinuedfocusontheproductionof

combustionenginevehiclesoralatestartofnationalproductionofEVsandbatteriesmayresultinthelossofinternationalmarkets,adeepeningofthecurrenttrendof

increasingimportcontentindomesticallyassembledvehicles,andincreasedvehicleimports.ForBrazil,suchprocessescouldresultinachangeinthecountry’spositionconcerningthetradebalancewithimportantpartnereconomiesinLatinAmerica.

IfpromotinggenderparityinthetransitiontoEVsisagovernmentobjective,

trainingandprofessionalinclusionprograms,withaparticularfocusonwomenintheworkforce,couldhelpavoidworseningtheexistingwagedifferentialbetweenmenandwomeninEVproductionandothersectors.TheremodelingofBrazil’s

vehiclefleetwillhaveimplicationsforgenderequityinthesectorsdirectlyand

indirectlyinvolvedinvehicleproduction.Anticipatingthegenderimpactsofthe

transitionwillbecrucialfordesigningpoliciesaimedatensuringthatthedevelopmentofaEVindustryinBrazildoesnotcreatenewinequalitiesinthelabormarketor

reproduceexistingones,andforpromotinggreatergenderinclusionintheBrazilianlabormarket.

ivICCTREPORT|BRAZIL’STRANSITIONTOELECTRICVEHICLESANDITSEFFECTSONEMPLOYMENTANDINCOME

TABLEOFCONTENTS

Executivesummary i

Whatdoweknowaboutjobcreationintheelectricvehicleindustry? 1

CharacteristicsoftheglobaltransitiontoEVs 3

Sales,models,andsegmentsinthelargestmarkets 3

ElectrificationtargetsinLatinAmerica 3

EVpenetrationinBrazil 4

TheEVvaluechain 5

Methods 8

Scenarios 8

Input-outputanalysis:Calculatingtheimpactonemploymentstructure 13

Results 17

Greenhousegasemissionsinroadtransport 17

Employment 18

Incomegenerationandvalueadded 22

Sensitivityanalyses 23

Conclusionandrecommendations 26

References 28

1ICCTREPORT|BRAZIL’STRANSITIONTOELECTRICVEHICLESANDITSEFFECTSONEMPLOYMENTANDINCOME

WHATDOWEKNOWABOUTJOBCREATIONINTHEELECTRICVEHICLEINDUSTRY?

Thereisnoconsensusregardingtheimpactsofbatteryelectricvehicle(EV)

productiononjobcreation.Studies,opinionsurveys,andstatementsfrom

manufacturerstendtoreachconflictingconclusions—rangingfromsignificantjob

lossestomoderateincreasesintheemployedworkforce—asaresultofchangesinthevehiclefleet.Thereareseveralreasonsforsuchdifferences.Oneofthemisthelackofaconsistentdefinitionofthesectorsandjobsinvolvedinthistransformation:Arewe

referringtoautomakers,autopartssuppliers,orallindustrieswithintheautomotive

valuechain?Anotherreasonisvariationinthegeographicdistributionofproduction

ofkeycomponentsforEVs:Wherearebatteriesmanufactured?Whateffectsdoesthisgeographicdistributionhaveontheexportandimportofvehicles?

AstudycommissionedbytheEuropeanAssociationofAutomotiveSuppliers(Rennertetal.,2021)concludedthatthetransitiontofullyelectricvehiclescouldresultinanetlossof275,000jobsinEuropeby2040.However,thisestimateconsideredonlyjobsrelatedtotheproductionofpowertrain1componentssuchasinternalcombustion

engines,tractionbatteries,andelectricmotors.Harrisonetal.(2019,p.5)estimatedthattherapidadoptionandproductionofEVscouldleadtoanetincreaseofupto

590,000jobsinEuropeby2030acrosstheentireautomotivevaluechain.Meanwhile,thoughKuhlmanetal.(2021)foundonlyasmallnetchangeintotalemploymentby

2030duetothetransitiontoEVsinEurope,theyhighlightedsignificantsectoraljoblossesintraditionalvehicleassemblyandautopartsmanufacturing,whichtendedtobeoffsetbyjobgainsintheEV-specificautoparts,charginginfrastructure,andelectricitygenerationsectors.

Amidtheindustry’stransitiontonewtechnologies,thedomesticproductionofkey

componentssuchaselectricmotorsandbatteriesbecomescrucialtodeterminingtheemploymentimpactsofthetransformationofthefleet.AccordingtoBarretandBivens(2021),consideringonlytheassemblyandautopartsmanufacturingindustries,ifEVsaccountedfor50%ofvehiclesalesby2030,74,000jobswouldbelostintheUnited

StatesiftherewerenoincreaseindomesticcontentinEVs.Alternatively,thesamesalesscenariowouldresultinagainof150,000newjobsintheUnitedStatesiftherewereanincreaseinlocalproductionofbatteriesandEVs.

Anothercommonlycitedargumentisthatjoblossesinvehicleproductionare

inevitableduetothelowernumberofpartsandcomponentsinEVs.However,

accordingtoMcElroy(2019),assemblingtwosimilarvehicles,oneelectricandone

combustion-powered,wouldrequireacomparablenumberofstationsandworkers

ontheassemblyline,astheautomotivebatterycontainsnearlyasmanycomponentsasacombustionengine.InastudycommissionedbytheUnitedStatesEnvironmentalProtectionAgency(EPA),twosimilarvehicles—anEVandagasoline-powered

vehicle—weredismantledandalltheircomponentswerecataloged.Intheend,the

totalnumberofcomponentsintheEVwas1,584,comparedto1,307inthegasoline-

poweredcounterpart.Evenafterexcludingallcomponentsrelatedtothebattery

andcombustionengine,theEVstillhadmoreparts:1,475intotal(FEVConsulting,

2023).2Automakersthemselvesarenotinagreementonthispoint(Levin,2022).BMWhasstateditwillnotcutjobsduetothetransitiontoEVs,butotherfactors—such

ascompetitionwithrivalautomakersandchangesinworkforcecomposition—maystillreducethenumberofjobpositions(Charette,2023).Asurveyof197industry

1Thetermpowertrainreferstothecomponentsofavehicleresponsibleforpropulsion,includingcombustionengines,electricmotors,andbatteriesinEVs,thetransmission,andaxles.

2Thestudytreatedthecombustionengineasasinglecomponent.

2ICCTREPORT|BRAZIL’STRANSITIONTOELECTRICVEHICLESANDITSEFFECTSONEMPLOYMENTANDINCOME

executivesandmanagersindicatedthat85%expectedtomaintainorexpandtheirworkforceduetotheadoptionofnewtechnologies(RockwellAutomation,2023).

Theresultsbrieflysummarizedaboveindicatethatastudyoftheconsequencesofthetransitiontoelectricvehiclesforthestructureofemploymentwouldbenefitfroman

analysiscapableofcapturingeffectsacrossvariouspartsofthevaluechain.Sucha

broadanalysisisessential,giventhenumerousfactorsthatcaninfluencejobcreationwithintheEVproductionchain.Thesefactors,inturn,maybeshapedbythemixof

publicpolicies,suchasthoserelatedtolocalcontentofproductionandtheimportandexportofvehicles.

ThisstudydevelopsandpresentsascenariofortheelectrificationofBrazil’svehicle

fleet.Wecomparetheimpactsgeneratedbythisscenarioontheemployment

structurewiththoseofaBaselinescenario,characterizedbythecontinueddominanceofinternalcombustionenginevehicles(ICEVs)insales,alongsidetheexpansionof

biofueluse.Theeffectsoneconomicactivityandemploymentineachscenarioare

estimatedbyconvertingprojectionsofvehicleandfuelsalesintomonetaryvalues

andapplyinganationalinput-outputmatrixtoassesstheimpactofthisfinaldemandacrossallsectorsinvolvedintheproductionchain—suchasautoparts,electrical

machineryandequipment,metals,glass,andrubber.

ThefollowingsectionprovidesabriefoverviewoftheexpansionofEVsalesglobally,

inLatinAmerica,andinBrazil.ItthenoutlinesthecharacteristicsofEVproduction,

usingICEVproductionasapointofcomparison.Thefollowingsectiondescribes

themethodologyusedtodevelopthetwoaforementionedscenarios—detailingthe

evolutionofvehiclesalesbysegmentandpowertrain,importsandexportsofvehicles,anddomesticproductionoftractionbatteries—andadaptstheBrazilianinput-output

matrixtoenablescenarioprojectionsthrough2050.Finally,theresultssection

presentsestimatesofgreenhousegasemissionsassociatedwitheachscenario,total

jobcreationanditsdistributionacrosseconomicsectorsandbygender,thegenerationofvalueaddedanditsdistributionbetweenwagesandprofits,andsensitivityanalysesregardinglocalbatterycontentandvariationsinvehicleexports.Thereportconcludeswithpublicpolicyrecommendationsderivedfromthefindings.

3ICCTREPORT|BRAZIL’STRANSITIONTOELECTRICVEHICLESANDITSEFFECTSONEMPLOYMENTANDINCOME

CHARACTERISTICSOFTHEGLOBALTRANSITIONTOEVS

SALES,MODELS,ANDSEGMENTSINMAJORMARKETS

Thetransitiontozero-emissionvehiclesisunderwayintheworld’slargestautomotivemarkets.DrivenbytargetstobanthesaleofICEVsandbyincentivesforboth

consumersandmanufacturers,EVsaleshavescaledupsince2020.In2022,more

than10millionEVsweresoldglobally—a54%increasecomparedtothepreviousyear.Ofthese,99%werelight-dutyvehicles.Approximately73%werefullybattery-electricvehicles,whiletheremaining27%werecomposedalmostentirelyofplug-inhybrids.Around59%ofEVsweresoldinChina,and25%inEurope(Chu&Cui,2023).

IntheEuropeanUnion,andmorerecentlyinCanada,bansonthesaleofnewlight-dutyICEVsstartingin2035(Sen&Miller,2023;GovernmentofCanada,2023)arebeing

supportedbyincentivepoliciesaimedatpromotingtheadoptionofzero-emission

vehicles.InEurope,forexample,FranceandGermanyhaveofferedsubsidiesofup

to€5,000and€4,500,respectively(Chu&Cui,2023).Thesetargetsandincentive

policieshavebeenaccompaniedbyincreasesinthemarketshareofEVsinthelargestlight-dutyvehiclemarkets.In2022,EVsalesaccountedfor27%ofthemarketinChina,21%intheEuropeanUnion,7%intheUnitedStates,and20%intheUnitedKingdom

(Chu&Cui,2023).

IncreasedproductionofEVsandbatteries,alongwiththedevelopmentofbattery

chemistriesthatrelylessonhigh-costrawmaterials(suchascobalt),haveledto

reductionsinthepriceofEVs.AccordingtoChenetal.(2024),electricpassenger

cars,SUVs,andpickuptrucksareexpectedtoreachpriceparitywithcomparable

ICEVsasearlyas2028–2029.Inapessimisticscenarioinvolvingrisingpricesforkeyrawmaterialssuchaslithium,nickel,andcobalt,thisparityisprojectedtobereachedby2032.

BatteriesaccountforalargeshareofEVproductioncosts.Technological

advancementsandeconomiesofscaleintheproductionofbatterieswillplayakey

roleinachievingcostparitybetweenEVsandICEVs.In2023,theproductioncosts

oflithium-ionbatteriesreturnedtotheirhistoricaldownwardtrajectoryafteraslight

increasein2022(BloombergNEF,2023),andthisdownwardtrendisexpectedto

continueinthecomingyears.Estimatessuggestthatreductionsinthepriceofraw

materialsandinnovationsinmanufacturingprocesses—suchaschangesinbattery

chemistriesandstreamliningofproduction—couldlowerbatterycostsbyupto40%in2025and60%in2030,relativeto2023levels(GoldmanSachs,2024).

ELECTRIFICATIONTARGETSINLATINAMERICA

Theambitiontodecarbonizeroadtransportationisnotlimitedtotheworld’slargest

markets.LatinAmericaaccountedfor7%ofglobalnewvehiclesalesin2020andits

motorizationratescontinuetorise(Kohlietal.,2022).Inthiscontext,severalcountriesintheregion—includingsomeofBrazil’skeytradingpartners—haveestablishedtargetsrelatedtoEVadoption.Forexample,Chile’sgoalscallfor100%ofnewsalestobe

zero-emissionvehiclesforpassengercarsandurbanbusesby2035,andfortrucksandintercitybusesby2045.Colombiaprojectsthatitselectriccarfleetwillreach

600,000unitsby2030,andthatallnewurbanbuseswillbezero-emissionby2035.3Othertargetsincludeexclusivesalesofzero-emissionlight-dutyvehiclesinCostaRicaby2050andsignificantincreasesinEVsinEcuadorby2040(Barassaetal.,2022).

3Ecuador’stargetsaimforzero-emissionvehiclesalesof60%–70%forurbanbuses,20%–25%forlight-dutyvehicles,and30%–40%fortrucksby2040.

4ICCTREPORT|BRAZIL’STRANSITIONTOELECTRICVEHICLESANDITSEFFECTSONEMPLOYMENTANDINCOME

InJune2022,theMexicangovernmentannouncedthat50%ofallvehiclesproducedinthecountrywouldbezero-emissionby2030.Mexicoisalsoasignatoryofthe

non-bindingCOP26declaration,whichproposestheadoptionof100%zero-emissioncarsandvansby2040(Pineda,2022).BrazilandArgentina,however,donotyethaveofficialtargetsfortheadoptionofzero-emissionvehicles.

EVPENETRATIONINBRAZIL

EVpenetrationinBrazilremainsmodestbutisgrowing:in2023,batteryelectriclight-dutyvehiclesaccountedfor0.9%oftotalsales,and2.6%whencombinedwithplug-inhybrids.Inthefirsthalfof2023,3,778batteryEVsweresold,whilebetweenJulyandDecemberofthesameyear,therewasanotablesurgeinsales,whichtotaled15,532units,or1.25%oflight-dutyvehiclesalesduringthatperiod(ABVE,2024).Inthefirsthalfof2024,EVsrepresented3%oflight-dutyvehiclesalesinBrazil,totalingaround31,000units,afigurethatalreadyexceededtotalEVsalesforallof2023.

Thisincreaseislinkedtoagreateravailabilityofmodelsand,morerecently,toEVswithlessprohibitiveprices.AccordingtotheBrazilianVehicleLabelingProgram(INMETRO,2023),theBrazilianmarketoffered101electricmodelsin2023,representing9%ofallmodelsavailableinthecountry—a600%increasecomparedtothe14modelsavailablein2020(INMETRO,2020).Bytheendof2023,fivemodelswereavailableforunder

R$150,000(Schaun,2023).AlthoughthisisstillsignificantlyhigherthanthepriceofthemostaffordableICEVs,whichcostaroundR$60,000toR$70,000,theR$150,000pricepointisnotfarfromtheaveragepriceofcarssoldinBrazilin2022(Rodriguez,2023),especiallywhentheloweroperatingcostsofEVsaretakenintoaccount

(Morrison&Wappelhorst,2023,p.13).

Despitetherecentincreaseindemand,domesticproductionofEVsandtheir

componentsremainslimited.Currently,electricbusesandmedium-dutytrucksare

alreadyproducedinBrazil,asaresomeelectricmotors.Batteryele