FGV Energy study analyzes Electric Car industry development

FGV Energy - Center for Energy Studies launched a special booklet on electric cars on May 24. This is the seventh publication of a series of booklets, launched in 2014, covering major subjects within the power sector in Brazil and around the world.

In this edition of the FGV Energy Booklet, researchers break down the impacts and challenges of bringing electric cars to the Brazilian marketplace. To achieve such goal, the first step is to understand why this particular type of vehicle is becoming more popular around the world. There are two possible explanations: the energy transition process set in motion around the world in response to global warming, and the superior energy efficiency of electric cars compared to internal combustion vehicles, besides the fact that this particular market niche holds plenty of business opportunities for multiple economic sectors.

As for the first question, the Paris Agreement was signed in November 2016, through which most of the world’s countries undertook a commitment to limit the global temperature rise to 2 degrees above pre-industrial levels. This means that each country would have to reduce its greenhouse gas (GHG) emissions. One of the sectors of global economy with highest GHG emission levels is the transport industry. Therefore, a transition into electric mobility is essential to decarbonize this sector, considering that the electricity powering these vehicles must come from a GHG-free renewable source in order for this effort to be valid.

Secondly, electric cars are more efficient than conventional vehicles – electric cars have an energy efficiency rate of over 80%, while the rate of internal combustion vehicles hovers around 15% and 20%. Therefore, electric cars represent the natural evolution of vehicle technology, which has been developing since the automobile was invented in the 19th century.

Considering all of these needs, electric mobility has already been developing at different strides around the world – particularly among countries such as Norway, Netherlands, China and the U.S. In Brazil, however, electric cars are still few and far between. There were only a little more than 3,600 electric cars in the country by the end of 2016. Nonetheless, this industry is expected to grow over the next decade, when electric automobiles should reach 2.5% of the total number of vehicles licensed in 2026, according to data from the Brazilian Energy Research Company (EPE).

The booklet explains, however, that there are still many challenges to overcome before electric cars can really make a dent in Brazil, as well as in other countries. The availability of recharging infrastructure, the still high prices of batteries, the low autonomy of electric cars compared to conventional vehicles, and the need for incentives to raise popularity are some of the hurdles that still hold this technology down. The researchers pointed out, however, that electric cars generate new business opportunities for the various sectors involved – electric, automotive and mobility in general.

These challenges and opportunities were debated among public officials during the launch event, including José Mauro Ferreira Coelho e Ricardo Gorini (EPE); Reive Barros (Brazilian Electricity Regulatory Agency - ANEEL); Bruno Cecchetti (Enel Brasil); Marco Saltini, (Brazilian Association of Automakers - ANFAVEA); Ângelo Leite (Serttel Group); Celso Novais (Itaipu Binacional Electric Vehicle Program; and Claudia do Nascimento Martins (Brazilian Association of Electric Vehicles - ABVE).

Go to the website to read the booklet, available in Portuguese.