SP Government Launches Program to Encourage Electric Car Production in Brazil

The Government of SP Just Announced the Creation of a Program Aiming to Encourage the Production of Electric and Hybrid Cars in Brazil, Generating Benefits for Several Manufacturers in the Country

This Wednesday (30), the new program to encourage the production of electric cars in Brazil was announced by the government of São Paulo. Up to R$ 500 million in credits from the Goods and Services Circulation Tax (ICMS) will be made available to companies that invest in electric or hybrid mobility. The initiative of the Government of SP is part of the Pro-Green Vehicle program, which aims to attract R$ 20 billion in investments in the automotive sector over the next three years, that is, until 2025. The proposed model also estimates that the costs for adapting existing production lines and building new electric car factories will be amortized.

Check the Details of the Pro-Green Vehicle Program

Manufacturers of biofuel-powered vehicles will also be entitled to tax benefits on the ICMS for companies specializing in electric and hybrid cars. Another highlight of the SP government project is the reduction of pollutant gas emissions, such as carbon dioxide, by reducing the number of vehicles with combustion engines on the streets.

According to the governor of SP, João Dória, the state government signed the document at COP 26 with its commitment to meet decarbonization targets across the state by 2050. Dória states that the state administration is prioritizing the purchase of electric and hybrid cars, especially for the education and public safety sectors.

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In addition to the tax credit grants, the SP government has extended the term for bank guarantees or contractual obligation insurance required from companies producing electric cars. The guarantee, currently at 75%, will be reduced to up to 90%, and the warranty period will last for 3 years.

To receive the benefits of the Pro-Green Vehicle Program, a minimum investment of R$ 15 million is required, instead of the R$ 30 million currently required. Regarding the credit amounts, manufacturers with at least R$ 3 million to receive can participate, which was previously set at R$ 5 million. 

Entities Comment on the Electric Car Program

For Henrique Meirelles, Secretary of Finance and Planning, the measures promote the production of electric cars, which are less polluting, a trend that the whole world is adopting.

Meirelles states that the SP government plans to align with this trend, and this is just the beginning. It is a way to reduce pollutant gas emissions, generate more jobs, and take a bigger step towards a sustainable economy.

This current program aims to update the Pro Vehicle, which was launched in 2008 with the goal of environmental preservation and fostering innovation in a sustainable format, with the installation of projects for less polluting motor vehicles.

Benefits of Using Electric Vehicles

The main argument in favor of electric cars is the fact that they are less polluting compared to traditional models. This type of vehicle can reduce CO2 emissions by about 33% over its lifetime.

Moreover, these vehicles are quieter since the engines are powered by gasoline, and fossil fuels are noisier, causing much greater impact in cities.

Electric Motors are so quiet that, in Europe, there is a law requiring manufacturers to add artificial noise to their cars when moving at low speeds.