Brazil is heading towards the hybrid vehicle fever with million-dollar investments on the horizon.

Brazil is on the verge of a possible hybrid vehicle fever, with a wave of investments announced by the world's leading car manufacturers. These investments are aimed at developing more environmentally friendly models in Latin America's largest economy, in a move that promises to transform the landscape of the automotive sector in the country. Last week, two almost simultaneous announcements marked a milestone in this process. On one hand, the Stellantis group committed to making the "largest investment in the history of the Brazilian and South American automotive sector," with a disbursement of approximately US$6.1 billion between 2025 and 2030. On the other hand, Toyota announced an investment of around US$2.2 billion in Brazil by 2030, much of which will be allocated to hybrid vehicles. These announcements add to the plans previously announced by other major manufacturers such as Volkswagen, Renault, Nissan, General Motors, BYD, and Hyundai, who also have on their agenda the production of more environmentally friendly vehicles in Brazil. According to estimates from the National Association of Motor Vehicle Manufacturers (Anfavea), the country is expected to receive around US$23.4 billion in investments for the sector in the coming years. Anfavea's president, Marcio de Lima Leite, highlighted the importance of these record investments and anticipated the possibility of new announcements in the coming months. According to him, this wave of investments is largely due to government measures designed to promote local production of vehicles with cleaner engines, providing greater predictability to the sector. Brazil plans to gradually increase taxes on the importation of new technologies to discourage the entry of electric or hybrid vehicles manufactured outside its territory. In addition, the Green Mobility and Innovation Program (Mover), established by President Luiz Inácio Lula da Silva, offers tax credits to manufacturers committed to decarbonizing their operations. Sector experts see hybrids as an important transition, especially in a country where electric vehicle batteries are still expensive and where charging infrastructure outside major cities presents logistical challenges. In this sense, Brazil is betting on promoting local production of hybrid vehicles that can run on ethanol, a fuel with reduced CO2 emissions compared to petroleum derivatives. Although currently only a small fraction of vehicles in Brazil are electrified, sales of hybrid and electric vehicles have experienced significant growth in recent years. With the projected investments, it is expected that electrified vehicles will represent a considerable portion of sales in the country from 2029 onwards, with a clear focus on hybrids adapted to more sustainable fuels like ethanol. The commitment of automakers to producing more environmentally friendly vehicles in Brazil has sparked renewed interest in sustainable mobility in the country, marking a significant shift in the industry that promises not only to transform the automotive market but also to contribute to reducing polluting emissions in the country.