The Economic Attractiveness of Electric Vehicles in Brazil: The Importance of Incentive Policies

Abstract

Electric vehicles (EV) are emerging as less polluting alternatives to internal combustion engine vehicles (ICE). Within the context of the climate change, electric vehicles (EV) become an option for the decarbonization of the transport sector. This paper evaluates the economic attractiveness of a battery electric vehicle (BEV) and a hybrid electric vehicle (HEV) compared to an internal combustion engine vehicle (ICE) in Brazil. Considering the specific characteristics of the Brazilian market, such as the welldeveloped biofuels sector and the preference for vehicles with low acquisition value, EV adoption tends to be slower in Brazil. In addition, we emphasize the importance of incentive policies to encourage the adoption of electric vehicles (EV) in Brazil, considering the different profiles of potential EV adopters.