Abstract:

This report develops two distinct scenarios for the evolution of Brazil’s national vehicle fleet until 2050. The aim is to compare the effects, on the level of jobs and income, of an ambitious increase in EVs (the Electrification scenario) with a scenario in which combustion vehicles dominate sales until 2050 (the Baseline scenario). The two scenarios consider the production of light- and heavy-duty vehicles, divided into five segments: passenger cars, light commercial vehicles, medium-duty trucks, heavy-duty trucks, and buses. To estimate the economic consequences of remodeling the vehicle fleet, we chose to use a specific methodology—an input-output analysis—that allows us to consider the links between all sectors of an economy and identify the impacts of potential changes in its structure. The results show that, assuming labor productivity and the amount of inputs required for production remain fixed at current levels, the Electrification scenario would generate more than twice as many jobs as the Baseline scenario by 2050, thanks to more ambitious targets. This potential for job creation is due to an increase in aggregate demand that results from growth in EV sales and the expansion of the domestic production of automotive batteries.