Volkswagen has announced its plans to invest €1 billion (US$1.1 billion) in Brazil by 2026, with a focus on hybrid and electric vehicles.
The German automaker aims to achieve a 40% growth rate in the coming years.
The investment will not only support the development of electric vehicles but also include the advancement of ethanol-based combustion engines and the expansion of the car subscription business.
While prioritizing the hybrid and electric segment, Volkswagen acknowledges the importance of diversification by incorporating other technologies.
The company’s decision aligns with the global trend of transitioning toward electric mobility and reducing dependence on fossil fuels.
In related news, the Brazilian government is increasing spending on its “popular” car program, which aims to lower vehicle prices through tax incentives.
Finance Minister Fernando Haddad confirmed that the program’s extension will cost approximately R$300 million, funded by the anticipated reduction in diesel taxes starting in October.
A portion of this funding was already accounted for in the original provisional measure, but an additional measure is required to allocate the remaining R$200 million.
Critics argue that such subsidies for the automotive industry have been an ongoing and ineffective practice.
They highlight the wasteful expenditure of billions of reais in taxpayer money, attempting to revive an industry that has struggled for over a decade due to challenges posed by past Petrobras administrations.
Volkswagen’s investment in Brazil’s electric vehicle sector demonstrates the company’s commitment to embracing sustainable mobility.
It also reflects the wider global shift toward electric transportation, emphasizing the need for diversified energy sources and reduced environmental impact.