Brazil Automotive Incentives for EV Competition and Innovation
Brazil’s MOVER Program (Programa Nacional de Mobilidade Verde e Inovação), launched in June 2024, sets stricter environmental standards and provides incentives that are driving over USD 26 billion in automaker investments, while challenging traditional manufacturers to rapidly adapt amid competition from EV-focused Chinese firms.
Brazil’s MOVER Program (Programa Nacional de Mobilidade Verde e Inovação), enacted in June 2024, replaces Rota 2030 with stricter environmental standards and expanded tax incentives to encourage innovation and diversification in the automotive sector. It offers roughly USD 4.8 billion in R&D-linked credits through 2028, applies an Industrialized Products Tax (IPI) bonus–malus tax based on vehicle emissions, and mandates recycled content and lifecycle carbon measurements. The program has already spurred over USD 26 billion in announced automaker investments. Read more about the MOVER program and automakers’ investments.
Challenges for Traditional Automakers
The program’s strict sustainability and efficiency requirements, like lifecycle carbon footprinting and recycled content mandates, may require significant changes to local manufacturing processes and supply chains, increasing costs and complexity.
The IPI bonus–malus system penalizes less efficient or higher-emission vehicles, affecting traditional combustion-engine models still popular in Brazil, reducing their competitiveness and profitability.
Chinese competitors, focused on electric and hybrid vehicles, are better aligned with the program’s efficiency and innovation incentives, giving them an edge in the rapidly growing EV segment and pressuring traditional OEMs to accelerate their electric transition under tight timelines and investment demands.
Automakers must quickly adapt to new regulatory, technological, and market dynamics that favor more efficient, innovative vehicles, which can be costly and operationally challenging in the short to mid-term.
Opportunities for U.S. Companies
The MOVER Program opens significant opportunities for U.S. firms to provide advanced technologies, components, and services that help automakers meet efficiency and innovation requirements. This includes supplying electric and hybrid vehicle technologies, high-efficiency engines, battery systems, emissions-control solutions, recycling and circular economy technologies, and consulting services to support lifecycle carbon measurement and compliance. U.S. companies can also leverage partnerships with Brazilian automakers to participate in R&D projects supported by the program’s USD 4.8 billion in credits through 2028.
For more information or assistance navigating the Brazilian automotive industry, contact Thales Demarchi, Automotive Commercial Specialist, U.S. Embassy Brazil, São Paulo Office, at thales.demarchi@trade.gov.