What energy source for the light vehicle segment in Brazil?: an electricity, ethanol and gasoline price analysis
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The early and widespread adaptation of Flex-Fuel vehicles (FFVs) in Brazil has enabled the country to be a leader for ethanol production and use in the light vehicle segment. However, given the country’s natural resources and today’s technological progress when it comes to Electric vehicles (EVs), electricity is an energy source that owes to be considered as an alternative to ethanol for light vehicles. To the best of our knowledge, no study has been performed to compare the country’s price of electricity and ethanol as energy sources for this vehicle segment. This is a first attempt to consider both alternatives in the Brazilian market. The goal of this market study is to provide the reader with an understanding of both ethanol and electricity’s price attractivity as energy sources for light vehicles in Brazil. The United States were used as a benchmark in order to evaluate both energy source relative attractivity. The results obtained demonstrated a clear competitive advantage of electricity over ethanol and gasoline in the light vehicle segment in Brazil. When considering median price of energy sources alone, electricity is 6.6 times cheaper than ethanol and 6.7 times cheaper than gasoline. What’s more, the price gap between energy sources is much higher in Brazil compared to the US, making electricity comparatively more attractive in Brazil. Thus, when considering prices alone, electricity is therefore an desirable option to look into in Brazil for the light vehicle segment, both in terms of absolute and relative numbers. While this market study is a first attempt at comparing electricity and ethanol as energy sources for light vehicles in Brazil, further research will be needed in order to evaluate the total cost of ownership for FFVs and EVs as well as to understand the challenges ahead in terms of infrastructure, electric grid capacity and EV subsidies, etc.