Brazil has just taken several steps to pave the way for the adoption of new engine technologies which is advancing very slowly in our region. With specific incentives and new tariff rules, that country’s government is paving the way for businesses to leverage their production capabilities and place themselves at the forefront of Mercosur’s transformation.
A few hours before saying goodbye to 2023, the federal government published the provisional measure establishing the agreement green mobility and innovation program (MOVE), replacing the ROTA 2030 program (2018-2022) and in continuity with the sectoral policy started with the Innovar Auto program (2013-2018).
A few months ago, in June 2023, they announced the end of Reduce import taxes for low-emission vehicles. This measure, which recently entered into force, is in line with the objectives of the MOVER program and, although it means taking a step backwards for the development of the electric vehicle market because rrecomposes extra-zone import duties to bring them to 35% in 2026, What it really aims to do is protect the internal market for production “made in Brazil”.
The new MOVER program, through which it is expected to generate investments by 100 million dollars a yearpromotes decarbonisationthe use of biofuelsHe waste sorting of materials and the inclusion of new technologies driving assistance.
However, the most interesting aspect is that it promotes tax relief based on the environmental footprint, incorporating a novelty: calculation of carbon emissions from well to wheel, that is, from the energy source to its vehicular consumption. This situation is particularly important in the case of Brazil, because it turns out to be a further incentive for the development of its energy matrix. related to ethanol production.
In this way, it drives industrial development hand in hand with the comparative advantages which has in the production of ethanol derived from sugar cane, strengthening a virtuous circle of production complementarity and comparative advantages.
Without a doubt, our neighbor has begun to accelerate the process of technological reconversion in a planned and agreed mannerhaving the incentives and tariff rules necessary for automotive companies to find the right path to implement their regional plans regarding electric mobility, without losing sight of their industrial potential.
The situation in Argentina is very different. Despite having an established industrial network, there is still no discussion about what role it will have in terms of new engines.
In recent years, however, several bills have been presented to Congress to promote electric mobility none of them got legislative treatment. Partial visions, proposals without consultation with the production actors, lack of consensus were some of the characteristics of these bogged down projects.
Despite this, there are several questions that need to be answered. How long will Argentina maintain the production of combustion vehicles without putting it at risk subsistence in your sector? Argentina should, emulating Brazil, exploit the advantages conferred by its energy matrix and encourage motorization natural gas and the biofuels?Or you should focus more on your current manufacturing specialization that positions you as fourth largest manufacturer of medium pickups in the worldwhere will technological change come later and postpone that debate?
Meanwhile, companies balance the needs of input power and components, commercial debts acquired in the face of the inability to transfer foreign currency abroad in the last two years and a domestic market that It’s starting to show signs of cooling based on the fiscal austerity policies implemented by the government.
However, the urgency of the macro situation should not be an impediment to thinking and planning medium and long-term sector strategies, especially in an industrial sector so influenced by industrial policies, incentives and international trade agreements. Argentina must address the debate on new technologies and not be a mere spectator of what happens on the other side of the border because we risk missing the train of technological and productive change.
Source: Clarin
