Brazil to Mandate Vehicle Manufacturers to Invest 1.8% of Revenue in R&D

Brazil’s government will mandate a 1.8% revenue investment in research and development (R&D) by vehicle manufacturers within the National Green Mobility and Innovation Program (MOVER) starting 2029.

This measure supports making the country’s vehicle fleet greener through tax benefits.

This policy was unveiled on Tuesday, and key figures, such as President Luiz Inácio Lula da Silva and several ministers, were in attendance.

MOVER introduces a unique credit line encouraging the mobility sector to invest in R&D. This initiative is expected to create up to 1.5 million jobs, boosting the automotive industry.

Starting in 2024, companies must gradually increase their R&D investment, reaching 1.8% of their revenue by 2029. This requirement varies slightly across different segments of the industry.

Firms must comply with several criteria to participate in MOVER, including a specific investment minimum and adherence to tax obligations.

The program allocates 19.3 billion reais ($4 billion) between 2024 and 2028, funding industrial relocation, R&D projects, and fixed asset investments.

Firms must invest within Brazil but have flexibility in managing or outsourcing their R&D projects. Additionally, significant R&D investments could yield extra credit benefits.

MOVER replaces the previous Rota 2030 program and aims to enhance the automotive sector’s sustainability and innovation.

It marks a strategic effort to modernize Brazil’s vehicle fleet and promote new technologies in mobility and logistics, highlighting the connection between environmental initiatives and economic development.

Background

Notably, February’s daily sales rate surged 18.4% to 8.7 thousand units, as Marcio de Lima Leite, Anfavea’s president, shared with the media.

Leite underscored February’s performance as unprecedented since before the pandemic, marking a significant milestone in daily sales averages.

Electrified vehicles particularly shone, with 22.5 thousand units sold in the year’s first two months, including 8 thousand electric and 14.5 thousand hybrid vehicles.

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