Hybrid-flex cars are good for Brazil's decarbonization process: VP

Brazil's ability to produce and sell hybrid cars that can run on 100% ethanol is a huge asset for its auto industry as global economies push for decarbonization to tackle climate change, Vice President Geraldo Alckmin told Reuters.

Alckmin on Thursday attended the opening of a factory by Chinese carmaker Great Wall Motor Co Ltd that will produce hybrid cars, including a flex-fuel pickup called Poer. "It brings together ethanol - a clean, renewable energy - and electricity. In a continental-sized country, that is a wonderful alternative to protect the environment," Alckmin said in an interview on the sidelines of the event.

Brazil has one of the world's largest ethanol industries, and most cars in the country can run on 100% biofuel made from sugarcane or corn. GWM's launching in Iracemapolis, Sao Paulo was the second auto-related event for Alckmin in a week, having already received executives from Japan's Toyota in Brasilia last Thursday to discuss their investment plans in the country.

Toyota, which has been betting big on hybrid flex-fuel products in Brazil, announced this month it would invest 1.7 billion reais ($341.5 million) to produce a new compact car with those specifications.

Stellantis and Volkswagen are also investing in the technology, in contrast with U.S.-based General Motors and Ford, which have focused on fully electric cars. Alckmin, who is also President Luiz Inacio Lula da Silva's minister of development, industry and trade, welcomed GWM's investments and said his meeting with Toyota had also been "very fruitful".

He highlighted the export opportunities hybrid cars manufactured in Brazil can bring for the country as it pushes for re-industrialization, a process in which he sees the auto industry playing a key role. "It is very important because it is an industry of cutting-edge technology, with semiconductors and the whole decarbonization area," said the vice president. "It has a very long, value-adding chain, so it generates a lot of jobs."

Toyota had announced it would look to export its new hybrid car to 22 Latin American countries from Brazil, with engines to be built at is Porto Feliz plant in Sao Paulo state. GWM, which will start operating its plant in the country on May 1, 2024 and eyes creating about 2,000 direct jobs, also said it planned to ship Brazil-made cars abroad, with Latin American nations seen as key destinations. "We want to strengthen industrial exports," Alckmin said, adding that a proposed tax reform, more international agreements and export credit measures were on the government's agenda to reach that goal.