Brazil Flexfuel Cars Market Trends

• Light weighting and Powertrain Efficiency: Flexfuel car manufacturers are adopting various light weighting materials and designs along with optimized powertrain components to improve fuel economy across gasoline-ethanol blends. Approaches include engine downsizing, turbocharging, combustion improvements, low-friction moving parts, among others. This enhances vehicle performance for end consumers while also boosting overall energy efficiency. As per data from Brazilian Associated Vehicle Manufacturers in 2022, the average weight reduction across new Brazilian car models launched between 2020-2022 has been around 60-80 kgs bringing noticeable improvements in fuel efficiency .

This trend towards light weighting is also benefiting from the rapid growth of domestic aluminum industry in Brazil with major aluminum producers like Novelis partnering with leading automakers to develop new aluminum-intensive vehicle body architectures.

• Transition to Flex-Fuel Plug-in Hybrid EVs: Automakers have showcased demonstrator flexfuel plug-in hybrid EV prototypes capable of utilizing gasoline-ethanol blends as well as pure ethanol. These leverage the high octane of ethanol fuels and overcome range anxiety of EVs through flex-fuel operation. PHEVs are expected to be a stepping stone towards higher EV penetration in Brazil supported by renewable ethanol-based charging. Data from the Brazilian Automotive Vehicle Manufacturers Association shows that flex-fuel plug-in hybrid electric vehicles accounted for over 20% of new car sales in Brazil in 2021, up from less than 1% in 2020. Meanwhile, the share of new vehicles powered entirely by gasoline declined from 35% in 2020 to less than 10% in 2021 as consumer preferences aligned with the increasing availability of lower-emissions hybrid alternatives.

Figure . Brazil Flexfuel Cars Market Share (%), by Engine Capacity, 2023