Because Stellantis also loves Brazil
Stellantis will invest $6 billion in Brazil to produce flex-hybrid vehicles, a technology that combines electrification and biofuels. Volkswagen, General Motors and Toyota also have plans for the South American country, where the Chinese BYD also appears. All the details
Stellantis, the car company controlled by Exor and owner of brands such as Fiat, Peugeot, Jeep and Citroen, intends to invest 30 billion reals (around 6 billion dollars) in Brazil for the production of flex-hybrid vehicles, i.e. models hybrids equipped with an ethanol engine, an alternative fuel. These cars will be designed both for sale on the local market and possibly for export to neighboring countries: Stellantis, in short, could make Brazil its production base for South America.
The investment will cover a five-year period, from 2025 to 2030, as explained on Wednesday by the CEO of Stellantis, Carlos Tavares, and the head of the South American region, Emanuele Cappellano. The launch of the first flex-hybrid models will take place in the second half of 2024.
NOT JUST STELLANTIS: WHY CAR MANUFACTURERS HAVE SET THEIR EYES ON BRAZIL
Brazil's choice is linked to the energy transition acceleration plan presented last December by President Lula's administration. The program – nicknamed “Mover” – aims to incentivize investments in technologies for decarbonisation, including mobility, and provides tax relief for companies.
Stellantis is not the only car manufacturer to have focused on the South American country. Already in January the American General Motors had announced an investment of 7 billion reais; in February the German Volkswagen guaranteed 9 billion between 2026 and 2028; 5.5 billion are the funds allocated by the South Korean Hyundai and 11 billion those provided by the Japanese Toyota (one of the first companies to focus on the flex-hybrid ).
All these companies will invest in the production of flex-hybrid vehicles, considered a first step towards the electrification of the model offering. Electric cars are generally more expensive than petrol or diesel ones, and must rely on a charging infrastructure that is not always sufficiently widespread. For this reason, according to Tavares, “the automotive industry must enter clean mobility through accessibility. If the class can't buy, there is no volume and there is no positive impact on the planet."
WHAT ARE FLEXIBLE-FUEL VEHICLES
Hybrid-ethanol power should both open the doors to electric cars in Brazil and ensure a greater reduction in emissions: ethanol can be obtained from agricultural crops such as corn and can have an overall lower carbon footprint than traditional fossil fuels. In Brazil, the so-called flexible-fuel vehicles that can be powered exclusively by biofuels produced from sugar cane are extremely widespread: flex-fuel cars were introduced about twenty years ago and in 2023 they represented over 83 percent of all sales in the country, Bloomberg wrote. On the other hand, the market share of electric cars is minimal: just 0.4 percent. Hybrid models are only slightly more popular, at 2.1 percent.
STELLANTIS BIO-HYBRID TECHNOLOGY
Last August Stellantis presented four prototypes equipped with its Bio-Hybrid technology, which combines electrification and flex thermal technology and which was developed by the company's South American division.
Referring to the $6 billion investment by 2030, Tavares specified that it is “aligned and coordinated with the Brazilian government's Mover program, an extremely intelligent program that will bring Brazil to a new stage of safe, clean and accessible mobility. Bio-Hybrid technology”, he continued, “is an extremely efficient solution, which relies on the country's natural resources and which could potentially be extended to other countries in the region”.
Brazil, where it has three factories, is the hub of Stellantis' South American operations. In 2023, the company's sales in this country amounted to more than 878,000 units, for a market share of 23.5 percent: Fiat is the most popular brand both in Brazil and in the rest of South America.
CHINA ALSO LOVES BRAZIL
In addition to European, US, South Korean and Japanese automakers, Chinese ones also have big plans for Brazil. Almost simultaneously with Stellantis' announcement, BYD announced that it had begun construction of a factory in Brazil: it will come into operation by the end of 2024 or the beginning of 2025 and will have an initial production capacity of 150,000 units per year.
BYD – backed by US entrepreneur Warren Buffett – is the world's leading electric vehicle seller and one of the main battery manufacturing companies. Giorgia Meloni's government has contacted BYD (and other car manufacturers, both Chinese and non-Chinese) with the aim of concluding an investment agreement and bringing at least a second car manufacturer to Italy to balance the disengagement of Stellantis.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/stellantis-brasile-veicoli-flex-hybrid/ on Thu, 07 Mar 2024 08:59:41 +0000.