The Brazilian governmental body named the Commission for the Environment, Consumer Protection, and Monitoring of the Federal State (that’s a mouthful) moved last week to approve Senate Bill 174/2014, thereby exempting electric vehicles (as well as biodiesel vehicles running on at least 30% local fuel) from a tax on industrial products known as IPI.
Interestingly, the bill also removes import taxes on imported parts or technologies for which there are no reasonable local options (eg, electric vehicle battery cells or packs). What this means is that the cost of locally manufacturing electric vehicles (or possibly biodiesel ones) could soon be notably reduced, potentially lowering retail pricing to the point that more non-wealthy Brazilians can afford them.
The main barrier to wider electric vehicle (EV) or plug-in hybrid (PHEV) uptake to date in Brazil has been the relative lack of affordability of the technologies for most Brazilians. If moves are made to allow for relatively cheap local manufacturing (such as Senate Bill 174/2014), they could potentially change this situation.
Worth noting here is that Senate Bill 174/2014 still has to make it through the country’s Senate Committee on Economic Affairs. The potential is there for either: approval, modification, or outright disapproval. Presuming the bill passes that committee, it will then have to make it through the House of Representatives, and then will have to be approved or vetoed by the Brazilian president.
Concurrent with this approval of Senate Bill 174/2014, the Executive Committee of Foreign Trade Chamber Management adopted a draft of a resolution to make EVs exempt from some import duties, effectively lowering the tax rate from the current 35%. The exact rate is still up for negotiation apparently.
Source: TheCityFix Brasil