Given that Brazilian regulators are scaling back the amount of ethanol in the country's fuel supply, the country is likely to see a substantial jump in its plug-in vehicle adoption during the next few years, according to UK-based research firm Frost & Sullivan. The firm believes Brazilians will be buying more than 81,000 plug-in vehicles a year by 2020, when as many as 35 plug-in models will be available to the public there.

More specifically, almost three-quarters of those 81,000 will be either plug-in hybrid vehicles or extended-range plug-ins, with the remainder being pure battery-electric vehicles. Frost & Sullivan expects battery-production prices to drop by between 25 and 40 percent by the end of the decade, and plug-in vehicle prices to follow suit with a 25-37 percent decline, Frost & Sullivan says.

Brazil has ascended to become the world's fourth-largest automotive market and has long focused on ethanol as its green-vehicle method of choice, thanks in part to its abundant sugar cane crops. That focus has lessened in recent years, however, and in 2011, Brazil reduced its ethanol blend percentage from 25 percent to about 18 percent because of rising ethanol prices. Check out Frost & Sullivan's press release below.
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Supportive Legislations Usher in the Era of Electric Vehicles in Brazil, Finds Frost & Sullivan

Vehicle range, charging time, and initial cost of acquisition will be key purchase criteria

SAO PAULO, Brazil - September 5, 2013 - Brazil's electric vehicle (EV) market is set to grow substantially owing to supportive legislations, anticipated tax incentives for EVs, and enhancements in charging infrastructure. In fact, an estimated 35 EV models will be launched in the country, driving the market up to 80,877 units by 2020. Plug-in hybrids (PHEV) and range extenders will account for more than 70 percent of the market.

New analysis from Frost & Sullivan (http://www.automotive.frost.com), Strategic Analysis of Brazil Electric Vehicle Market, looks at how original equipment manufacturers (OEMs) in Brazil can leverage this potential, and choose the right product positioning strategy. The study reveals that in addition to conventional outright sales and leasing models, OEMs must pursue car sharing and partnerships with car fleets to gain market share.

"Although Brazil's automotive policy towards EVs is at an early stage, the second phase of its Inovar-Auto program will provide incentives for EV manufacturers and end users, thereby encouraging adoption," said Frost & Sullivan Automotive and Transportation Research Analyst Ananth Srinivasan. "The expansion of EV charging infrastructure, currently focused on Sao Paulo and Rio de Janeiro, to other key regions such as Pernambuco, Sergipe and Ceará will further boost uptake."

This development, however, remains slow, pegging market growth back to an extent. The continued preference for flex-fuel over hybrid electric technology is another restraint. Additionally, the lack of localized battery technology and the high initial costs of acquisition will hinder market penetration in the short- and medium-term.

Nevertheless, Frost & Sullivan believes that partnerships with utility companies will provide the necessary support to widen EV charging infrastructure in Brazil, and improvements will gather pace by 2017. Local participants in battery technology development will have significant growth opportunities.

Moreover, product costs will fall on the strength of tax incentives. Frost & Sullivan's estimates point to a 25 to 37 percent reduction in PHEV prices and 25 to 40 percent reduction in battery EV prices over the next seven years.

"Product launches in the small- and mid-size sedan segments, maintaining a price bandwidth of $40,000 to $65,000 and offering diverse business models, are key success factors in the Brazilian EV market," noted Srinivasan. "Market participants will also benefit from an early entry strategy."

If you are interested in more information on this research, please send an e-mail to Francesca Valente, Corporate Communications, at francesca.valente@frost.com, with your full name, company name, job title, telephone number, company e-mail address, company website, city, state and country.

Strategic Analysis of Brazil Electric Vehicle Market is part of the Automotive & Transportation Growth Partnership Service program. Frost & Sullivan's related research services include: Electric Vehicle Charging Infrastructure in Europe, 2013 Outlook of the Global Automotive Industry, Turkish Medium-Heavy Duty Truck and Bus Market. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.
Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.
• The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
• The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.
For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?


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    • 1 Second Ago
  • 12 Comments
      Marco Polo
      • 1 Year Ago
      Brazilian ethanol remains a very important part of the Brazilian economy. Ethanol produced from sugar cane is vastly more viable economically, than the environmentally disastrous US corn-based Industry. However, even in Brazil, ethanol produced by sugar cane still relies on the quality and quantity of the harvest, which varies from year to year. In addition, prices are also affected by the demand for ethanol created by mandates in the US and Europe. US demand creates artificially high prices, creating domestic shortages in Brazil, creating further rain forest depletion equatorial countries (as well as food shortages).
        Actionable Mango
        • 1 Year Ago
        @Marco Polo
        "US demand creates artificially high prices, creating domestic shortages in Brazil" So... don't export as much?
          Marco Polo
          • 1 Year Ago
          @Actionable Mango
          @ Actionable Mango " So... don't export as much? " Idealistically, that would be a good policy, but well, y'know the old Latin/American saying, "working for the Yankee dollar" ! :) But seriously, the US ethanol mandate presents a terrible incentive for equatorial nations to cut down rain-forest to produce ethanol for US (and less so) European markets. Not only is this devastating for the environment, but creates nutrition shortages among some of the world most deprived peoples. I'm quite sure that if the average US ethanol user and supporter realized the environmental devastation, and human misery, the US corn-based ethanol industry creates both domestically and internationally, they would think twice about using such a product.
      Dave D
      • 1 Year Ago
      Thank God! I swear, if there is any place on earth that could benefit from shifting pollution away from city center....it's Brazil. I spent years working in São Paulo and that is the worst traffic on earth. I've had trips where it took me over 5 hours to get from Faria Lima to the airport which is about a 40 minute drive at 2:00am. And that ethanol smells like french fries when you're sitting in traffic. Seriously, it smells like french fries. That doesn't sound that bad, but it's actually kind of nauseating when you smell it for hours on end.
        • 1 Year Ago
        @Dave D
        Dave, it seems that you prefer gasoline fumes, is that it? FYI, ethanol as produced in Brazil, from sugarcane, cuts CO2 emissions by up to 90% compared to gasoline. Does that work well enough for you? What that means, in a way that anyone could understand, is that in major Brazilian cities, every time the use of gasoline increases and ethanol decreases, there are more hospitalizations because of cardiovascular and respiratory diseases, public health costs go way up, and the number of deaths related to these ailments also increases. This direct relationship is in a landmark study by the University of São Paulo, which has been translated into several languages because of its obvious relevance. I'll take the smell of french fries over ending up in hospital any time. But you must have detected that smell several years ago, when technology wasn't what it is today and engines didn't burn the fuel as well as they do now. You no longer notice any peculiar smell because of the ethanol, and back in the 80s and early 90s, when that was the case, it was more like a sweet smell in the air, not really french fries...
          Actionable Mango
          • 1 Year Ago
          Dave said "Thank God" in response to an article about Brazil reducing pollution by moving from Ethanol to EVs. You imply that he prefers gasoline, which he did not say at all.
      Warren
      • 1 Year Ago
      It isn't only the ethanol that smells. :-) http://www.nytimes.com/2013/09/15/business/wall-st-exploits-ethanol-credits-and-prices-spike.html?pagewanted=all&_r=0
      korblalak
      • 1 Year Ago
      About time the Cariocas got on board.
      • 1 Year Ago
      Your story, as well as the Frost & Sullivan report, are outdated. In March of this year, the Brazilian government reinstated the 25% ethanol blend in all gasoline sold in Brazil. Year over year, ethanol sales in Brazil are up close to 20%, and production is also up by about the same percentage. Hybrids remain a very limited vehicle option in Brazil, with only high-end, expensive models available. Electrics are little more than na experimente. The numbers you quote for the next few years are extremely distant from what you see on the streets of Brazil. Currently, about 90% of all light vehicle sales are cars equipped with flex-fuel technology, while more than 60% of all cars on the road are also flex. At least two Brazilian automakers are working to introduce straight ethanol vehicles on the market, while Ford and Honda have raised the possibility of introducing cheaper hybrid models that would be equipped with flex-fuel engines, so even a hybrid in Brazil will continue to use ethanol.
      Wm
      • 1 Year Ago
      "... will be either plug-in hybrid vehicles or extended-range plug-ins..." Someone actually thinks there is a difference?
        Actionable Mango
        • 1 Year Ago
        @Wm
        I do. IMHO a plug-in EV with range extender can be driven like an EV most of the time and you only need gas to exceed the battery range. Many go for months and months without buying gas. A plug-in hybrid is driven as a hybrid most of the time and only runs as an EV for short distances and slower speeds. You still need to regularly buy gasoline, but the frequency is reduced due to greater fuel mileage.
        Marco Polo
        • 1 Year Ago
        @Wm
        @ Wm "plug-in hybrid vehicles or extended-range plug-ins. " A hybrid vehicle is essentially a fossil-fuel powered vehicle, with EV technology to enhance fuel consumption and/or power. Allowing the battery to be plugged-in, allows greater dost savings. Extended range vehicles, are basically EV's , with the addition of a small fuel engine to increase battery by recharging the battery while remaining in electric operating mode, much like a locomotive. Although current EREV battery-only range is relatively limited, the technology is rapidly improving and EREV's, like the GM Volt, are proving an important evolutionary stage to the eventual adoption of BEV's.