Volkswagen starts producing electric trucks in Brazil

RIO DE JANEIRO, BRAZIL – Volkswagen Trucks and Buses this Monday, June 14, announced the production of the e-Delivery model, the first electric truck fully developed, conceived, and approved in Brazil by the assembler.

The 11-ton (4×2) model left the final assembly line this morning. In addition, an even larger 6×2 model (six support points for two traction axles) will also be manufactured.

In all, the company invested R$150 (US$30) million to adapt its Resende (RJ) plant to manufacture the vehicle – in 2019, at the time the new model was announced, the company said that 80% of the resources would come from BNDES (Brazilian Development Bank) and the remainder from its own capital.

The new model should cost about 2.7 times the value of a truck with a combustion engine. However, the automaker argues that the total operating cost of running an electric vehicle is 60% less than that of a truck with a diesel engine — making it more attractive and with payback in about a year.

“This is because an electric motor requires much less maintenance than a combustion engine. Moreover, when we factor in the cost of gasoline versus electricity, this reduction becomes clear,” says Roberto. Currently, the e-Delivery is capable of driving 200 km with no need for a battery recharge.

The company should manufacture around 100 units in 2021, with the goal of delivering 1,000 units next year and 3,000 per year by 2023, with its current production capacity. One of the main customers at the moment is Ambev, which has already signed a contract for the delivery of 1,600 units by 2023. In addition to Ambev, the assembler believes it will attract other customers for delivery of goods in urban regions, such as wholesalers and retailers.

Recent data show that the sector is booming. According to ANFAVEA (National Association of Automotive Vehicle Manufacturers) figures, between January and April this year, 35,862 trucks were registered, a 48% increase compared to the same period in 2020 — and a 19.5% increase compared to the period from January to April 2019.

“Nothing prevents us from manufacturing 10,000 units per year, it all depends on the demand for this model. E-delivery began to be developed four years ago and its launch coincides with the positive moment in truck sales and with the appreciation of ESG values in Brazil,” says Roberto Cortes, CEO and president of Volkswagen Trucks and Buses.

Challenges

Despite projecting a high demand, the assembler is focused on reducing the price over the coming years with the gain in scale and, mainly, with the nationalization of battery production – which accounts for the highest manufacturing cost of the e-Delivery. Today, the component is imported from Chinese manufacturer Contemporary Amperex Technology (CATL) and, to reduce its cost over the next few years, the automaker has promoted a meeting between the Chinese company and Brazilian battery manufacturer Moura, which have signed an agreement.

Consequently, Moura will import the lithium and install all other battery components in Brazil, thereby reducing the cost of the product for Volkswagen.

“The production of the e-Delivery marks the beginning of vehicular electrification in Brazil and Moura is very proud to be part of this process together with Volkswagen Trucks and Buses. Once more, we are part of the epicenter of innovation in the automotive sector by signing this important partnership with VWCO and CATL,” says Sérgio Moura, president of the Board of Directors of Acumuladores Moura, in a communiqué.

With an eye on efficiency

Given this potential and projecting future needs of the Brazilian market, VW states that this is only the first initiative towards electrification. According to the CEO, “a good part” of the R$2 billion investment announced by the company will be directed to this end in the coming years.

“The plan is to start in urban regions, which have more infrastructure for recharging stations, and gradually migrate to trucks capable of driving from ‘Oiapoque to Chuí’,” Roberto says.

The main challenge is overcoming long distance trips with the trucks in Brazil — the time to charge them, for example, is still a disadvantage compared to combustion engines. But the ever-increasing demand for sustainability has led automakers to invest more and more in this trend.

Today, in addition to Volkswagen, at least two other automakers offer electric trucks: FNM-Agrale and China’s Jac Motors sell models in Brazil. In February, the Chinese automaker announced that its 7.5-ton model has up to 250 kilometers driving radius, provided the driver does not use the air conditioning. In addition, Scania also began impact tests last year to implement its model.