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BRAZIL: Electric Car Revolution in the Making

Mario Osava* - IPS/IFEJ

RIO DE JANEIRO, Sep 23 2009 (IPS) - The electric vehicle – pure or hybrid – will trigger an energy and industrial revolution worldwide in the coming decades, dealing a blow to liquid fuels. But plant-based ethanol will survive and grow, say Brazilian experts consulted for this report.

Electric car prototypes developed in Brazil. Credit: Alexandre Marchetti, Courtesy of Itaipú Binacional

Electric car prototypes developed in Brazil. Credit: Alexandre Marchetti, Courtesy of Itaipú Binacional

Today's automotive industry "will be buried within 15 years" if China meets its goals for electric vehicle production, says economist Gustavo dos Santos, of Brazil's National Bank for Economic and Social Development (BNDES).

As a result, the production of ethanol fuel (which burns cleaner than gasoline) will not grow as much as projected by the Brazilian government, and will flatten by 2020, predicts Santos.

The private Chinese vehicle assembly company BYD (Build Your Dreams), which began as a battery manufacturer, expects to sell 700,000 electric cars in 2010 and its annual production goal will increase to eight million units by 2025, with half for export, Santos told this reporter.

In addition, the Chinese government aims to turn the Asian giant into an automotive superpower, and subsidises the sale of electric or hybrid (a combination of battery and combustion engines) vehicles.

The advance of these new automobiles, which are more energy efficient than combustion engines, was blocked from the beginning by the vast political power of the oil companies, Santos pointed out. The automotive sector itself is resisting the changes because it means the loss of an entire system that has grown over the course of a century.

But now the threat of climate change is making a revolution of the energy and car-marking industries "inevitable," with consequences in two other principal sectors: electronics and chemical, not to mention urban planning, said the economist.

The gases emitted by vehicles fuelled by petroleum products like gasoline and diesel oil contribute to the greenhouse effect, which drives global climate change.

A technology race has taken off around the world, as reflected in the numerous electric car models on exhibit at the 63rd International Motor Show, running Sept. 17-27 in Frankfurt, Germany.

The show is further evidence of trends seen at similar exhibits elsewhere. Nearly all major car manufacturers are now producing some type of electric vehicle.

The governments of wealthy countries generously subsidise the development and sale of these alternative cars. General Motors, saved from bankruptcy by a U.S. government bailout, hopes a boost to its recovery will be the Volt, a rechargeable hybrid that can run 98 kilometres on one litre of gasoline, and will hit the sales floors in 2010.

China is tipping the balance of the game because "it doesn't have vested interests in the petroleum industry or the old automotive industry," noted Santos in an article published in the June/July edition of the journal "Costo Brasil".

China's goal of widespread car ownership among its citizens, necessary to sustain current economic growth, is impossible if it's based on petroleum, due to insufficient global supplies, according to Santos.

Batteries, which are still large and costly, need many hours to recharge even for short distances, and remain the Achilles heel of the electric car. But bringing the batteries up to speed, as it were, is only a matter of time. Vast investments have gone into battery technology in the automotive, cell-phone and information technology industries.

Santos believes that the future of the electric car depends "more on political questions than technological factors." In addition to pressure from the steel industry and oil companies, the United States, Europe and Japan will try to prevent China from becoming an automotive superpower, he says.

He also does not rule out a protectionist reaction that could plunge the world into another economic recession in the future.

But the electric vehicle could drive a technological revolution that would spur investment, supporting environmentally sustainable growth by "destroying a good portion of the global productive capacity," says the economist.

With a sharp decline in consumption, the price of oil would begin to fall in the next 10 years. In that case, Brazil has little time to make the most of the vast petroleum reserves discovered in 2007 under a thick layer of salt off its Atlantic coast, according to Santos.

Paulo Cesar Lima, an adviser on energy issues to the lower house of Congress, agrees with Santos.

Based on the sector's forecasts, which state that 30 percent of the vehicles manufactured in 2030 will be electric, Lima warns that underwater drilling, a costly endeavour, could become nonviable in four decades because of the projected low prices for oil.

Discovered at depths of 7,000 metres, Brazil's new oil would have high production costs, of around 40 dollars a barrel, according to energy officials.

The "decisive factor," in Lima's opinion, will be the environmental question, which will push the electric car to the forefront. In turn, the electric car "could affect the market for ethanol" and its new status as a commodity.

But the electric car revolution will not impede the survival and expansion of ethanol, says Lima, because the fuel reduces emissions of greenhouse gases.

Brazil's sugarcane ethanol is recognised for its environmental benefits, unlike ethanol from maize or other crops in the United States and Europe. But it faces criticism for the harsh labour conditions its production entails – and for displacing food crops.

The replacement of liquid fuels "will be a slow process, and for a long time to come we will see the predominance of the hybrid vehicle, which uses a combustion engine to generate electricity for propulsion," predicts Pietro Erber, president of the Brazilian Electric Vehicle Association.

For the hybrid, ethanol offers advantages over petroleum derivatives, especially diesel oil, which Brazil imports for its trucks and buses, says Erber. The advantages will be bigger if oil is taxed in order to discourage consumption and benefit the environment.

Oil would lose market share, but ethanol would not, because it is a "more homogeneous" fuel, which can be mixed with gasoline to improve performance and reduce emissions, according to Jayme Buarque de Hollanda, director of the non-governmental National Institute of Energy Efficiency.

And it is not just ethanol, says Buarque, but also biomass that will enjoy a boom as a cleaner, renewable source of energy. In addition to sugar and ethanol, sugarcane pulp is also a source of electricity and fertiliser (from distillation waste).

With its abundant water, sun and land, Brazil is especially well-suited to the diversified use of biomass. Lying ahead is a broad future for research and development to replace most of the "3,000 petroleum products," according to Fernando Siqueira, president of the engineers association of Petrobras, Brazil's oil giant.

For that future, Brazil should invest in fuel cells as a way to replace batteries, said Santos. Fuel cells convert fuel energy into electricity with greater efficiency than a battery, and would give ethanol long-term viability, despite the predicted death of the combustion engine.

In the economist's opinion, the current paradigm shift is creating a unique opportunity for Brazil, like China, to create a national automotive industry of electric vehicles, for which it has vast energy resources and the technological capacity, says Santos.

*This story is part of a series of features on sustainable development by IPS – Inter Press Service and IFEJ – International Federation of Environmental Journalists, for the Alliance of Communicators for Sustainable Development (

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