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Government Promises Tax Exemption and Popular Cars Will Become More Affordable in 2025! Meet the Cheapest Models!
Imagine leaving the dealership with a brand new 1.0 car, paying less thanks to government assistance? Well, the new Sustainable Car Program, which has been generating a lot of buzz, promises to eliminate the Tax on Industrialized Products (IPI) for flex 1.0 models until 2026. The idea is to step on the gas pedal for sustainability, focusing on cars that pollute less, like those powered by ethanol. But will this exemption really make the prices of the most popular cars in Brazil drop? Join us as we break it all down, with updated values and hot details about the 8 cheapest models of 2025!
What Is the Sustainable Car Program?
The government is bringing back the vibe of the 90s, when then-President Fernando Collor slashed the IPI for cars with engines up to 999 cc, giving life to icons like the Fiat Mille and VW Gol 1000. Now, in 2025, the proposal is the Sustainable Car Program, part of the Mover package, which mixes the old Green IPI with a focus on less polluting vehicles. According to the Ministry of Economy, the idea is to encourage the automotive industry to produce more efficient and recyclable cars, with IPI exemption for national flex aspirated 1.0 models.
But not everything is allowed: cars with turbo engines, imported cars, electric cars, or those with more than 90 hp are out of the game. “The focus is on ethanol, which Brazil considers less polluting, and reducing costs for the end consumer,” explains André Luiz, analyst at the National Association of Motor Vehicle Manufacturers (Anfavea). The measure, which is expected to be announced by President Luiz Inácio Lula da Silva in the coming weeks, will be valid until the end of 2026 when a new tax regime, possibly with a Selective Tax, comes into play.
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Which Cars Are in the Mix?
The program targets the most popular models in the market, those flex aspirated 1.0s that are already favorites among those seeking economy. We listed the 8 cheapest cars in Brazil in 2025, with original prices and estimates without the 7% IPI. Spoiler: discounts can reach almost R$ 7,000 in some cases! Check out the details:
1. Renault Kwid Zen 1.0
- Original Price: R$ 79.790
- Price Without IPI: R$ 74.013
- Engine: 1.0 SCe 12V, 71 hp, 10 kgfm
- Transmission: 5-speed Manual
The Renault Kwid is the king of the battle for the title of the cheapest car in Brazil, swapping places with the Fiat Mobi with every promotion. In March 2025, the French subcompact regained the top position after adjustments in the Italian rival. Equipped with electric steering, air conditioning, 4 airbags, LED daytime running lights, start-stop, and hill start assist, the Kwid is simple but delivers the basics with style. “It’s a car for those who want to save without sacrificing safety,” says João Silva, sales manager at Renault Brazil.
Note: The electric version of the Kwid (R$ 99.990) is not included in the exemption, as the program focuses on flex engines.
2. Fiat Mobi Like 1.0
- Original Price: R$ 80.990
- Price Without IPI: R$ 75.321
- Engine: 1.0 Firefly 6V, 75 hp, 10.7 kgfm
- Transmission: 5-speed Manual
Launched in 2016, the Fiat Mobi is a familiar face that still shines in the race for the popular car. Despite being a bit “old-fashioned” in design, it returned with the 1.0 Firefly engine in 2025 due to Proconve L8, which demands lower emissions. It comes with air conditioning, electric steering, stability control, and electric front windows. “The Mobi is for those who want a practical and low-maintenance car,” says Mariana Costa, a Fiat salesperson in São Paulo.
3. Citroën C3 Live 1.0
- Original Price: R$ 81.400 (R$ 73.990 practiced)
- Price Without IPI: R$ 75.702
- Engine: 1.0 Firefly 6V, 75 hp, 10.7 kgfm
- Transmission: 5-speed Manual
The Citroën C3 is Stellantis’ bet for those seeking space and affordability. Part of the C-Cubed project, it focuses on cost-effectiveness, with air conditioning, electric steering, stability control, and steel wheels with hubcaps. It uses the same Firefly engine as the Mobi and the Argo. “The C3 is ideal for small families who want comfort without spending much,” highlights Pedro Almeida, a specialist at Quatro Rodas.
4. Fiat Argo 1.0
- Original Price: R$ 91.990
- Price Without IPI: R$ 85.551
- Engine: 1.0 Firefly 6V, 75 hp, 10.7 kgfm
- Transmission: 5-speed Manual
The Fiat Argo has been around since 2017, but it’s still a solid option for those wanting a reliable hatch. In its base version, it comes with air conditioning, electric steering, onboard computer, and electric front windows. In 2026, it added LED headlights in the top versions and a new DRL in the basic model. “It’s a car that offers cheap maintenance and easy-to-find parts,” comments Lucas Mendes, a mechanic specialized in Stellantis models.
5. Peugeot 208 Active 1.0
- Original Price: R$ 91.990 (R$ 81.490 practiced)
- Price Without IPI: R$ 85.551
- Engine: 1.0 Firefly 6V, 75 hp, 10.7 kgfm
- Transmission: 5-speed Manual
Restyled in 2024, the Peugeot 208 gained a new logo and a more modern design. The Active version (formerly Like) features body-colored door handles, LED taillights, and 15” steel wheels. The optional Pack Tech adds 10.3” multimedia and digital air conditioning. “The 208 combines style with economy, perfect for daily use,” says Ana Ribeiro, a consultant at Peugeot.
6. Chevrolet Onix MT 1.0
- Original Price: R$ 94.900
- Price Without IPI: R$ 88.257
- Engine: 1.0 CSS Prime 12V, 82 hp, 10.6 kgfm
- Transmission: 6-speed Manual
The Chevrolet Onix has been going strong since 2019, with a redesign planned soon. It comes with 6 airbags, an 8” multimedia system, air conditioning, and electric steering. The 1.0 CSS Prime engine got a boost in 2025, with 80 hp on gasoline and 82 hp on ethanol, thanks to the new Proconve L8 programming. “The Onix is a sales icon due to its robustness,” states Carla Souza from GM Brazil.
7. Hyundai HB20 Comfort 1.0
- Original Price: R$ 95.790
- Price Without IPI: R$ 89.085
- Engine: 1.0 Kappa 12V, 80 hp, 10.2 kgfm
- Transmission: 6-speed Manual
With two recent facelifts, the Hyundai HB20 remains competitive. The Comfort version, now the base model, features 6 airbags, cruise control, and a radio with Bluetooth. The Kappa engine was adjusted for Proconve L8, maintaining 80 hp on ethanol. “The HB20 is synonymous with balance between price and features,” assesses Rafael Lima from Autoesporte.
8. Volkswagen Polo Track 1.0
- Original Price: R$ 95.790
- Price Without IPI: R$ 89.085
- Engine: 1.0 MPI 12V, 84 hp, 10.4 kgfm
- Transmission: 5-speed Manual
The Volkswagen Polo Track has taken over as VW’s entry-level hatch. Simple but functional, it comes with air conditioning, electric steering, and 4 airbags. In 2026, it lost intermediate versions to make way for the Tera. “The Polo Track is for those who want a reliable VW while spending little,” says Thiago Santos, a brand salesperson.
And Will the Savings Reach the Consumer’s Pocket?
The exemption from IPI seems like good news, but will prices really drop? As pointed out by UOL Cars, automakers like Stellantis, which already offer generous discounts, may not pass the tax cut on to consumers, maintaining promotional prices. “The industry might absorb the discount to increase margins, not the consumer’s pocket,” warns Maria Fernanda, an automotive economist. Until 2026, the program is expected to heat up the market, but the final impact depends on commercial strategies.
What’s Coming Up?
The official government announcement is expected in the coming weeks, with the exemption valid until December 2026. After that, a new Selective Tax could change the game. In the meantime, the popular car gains momentum with a focus on sustainability. “It’s an opportunity to modernize the Brazilian fleet with greener vehicles,” says Luiz Carlos from the Ministry of the Environment.
And what do you think of this news? Will the Sustainable Car make the dream of a new car more accessible? Leave your comment below and share it with anyone thinking of changing cars!
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