The new engine of the global automotive industry

As air pollution intensifies in global metropolises, the automotive industry is faced with the urgent need for transformation. This is why a study by the University of São Paulo highlights the seriousness of the situation: in cities such as São Paulo and Rio de Janeiro, around 60% of polluting emissions are attributable to vehicles. In addition, the World Health Organization (WHO) warns that air pollution contributes to around seven million deaths every year, underlining the critical relationship between air quality and public health.

As a result, the transition to electric vehicles, previously seen as a facet of a distant future, is gaining momentum. Europe is leading such change by imposing strict emission targets and encouraging traditional manufacturers to accelerate the electrification of their lines.

A necessary revolution

The leap in the automotive sector’s interest in committing to a more sustainable future ovelapped with the pandemic, which brought a new approach to environmental, social and governance issues: ESG. 

This movement has also converged with the war between Russia and Ukraine, as well as with the war in the Middle East and the growing economic awareness that oil and its derivatives will become increasingly scarce, so prices are therefore expected to rise.

In 2017, only one out of every 70 sold vehicles was electric; today, however, the figure is one in seven. In 2022, there was a considerable leap in this type of sales, as there was a 60% increase in the purchase of cars with this technology, according to data from the World Economic Forum.

Europe is a leader

Europe, particularly, is at the forefront of the sustainable revolution in the automotive industry. Driven by the adoption of stringent emissions regulations and the support of robust government subsidies, renowned brands such as Volkswagen and Volvo are accelerating the complete electrification of their fleets.

Countries like Norway and the Netherlands are leading the way, thanks to aggressive tax incentive policies and considerable investment in infrastructure. This contrasts with the situation in developing nations such as Brazil, where the adoption of electric vehicles is still in its infancy.

On the other hand, an important regulatory milestone has been set by the European Union: from 2035, all new cars will have to be CO2 emission-free. However, this doesn’t mean that only electric vehicles will be allowed on the streets, since, with the support of countries such as Italy, Bulgaria and Romania, Germany has proposed a revision to the legislation, allowing the continued production of combustion cars, as long as they run on synthetic fuels.

Another step forward might consist in the agreement to expand the charging infrastructure for electric vehicles and hydrogen refueling stations to meet growing consumer demands for convenience and accessibility.

Challenges and progress for electric mobility

Although promising, the journey towards electric mobility faces major obstacles, especially in the most populated regions and developing countries. One of the most critical examples is the lack of adequate infrastructure for electric vehicles. In addition, the growing demand for lithium, which is essential for the manufacture of batteries, raises environmental and social issues due to the effects of mining and its limited availability.

In Brazil, the scenario is particularly complex, since policies to encourage the adoption of electric and hybrid vehicles are still timid compared to those implemented by global leaders in the sector. The lack of charging infrastructure and the high tax burden are also considerable barriers.

However, efforts are being made to change this reality, since programs such as Rota 2030 demonstrate a commitment to sustainable development, although experts point to the need for an extensive and dedicated journey towards an effective transition to cleaner and greener vehicles.

Key innovations driving the sector

  • Improved lithium batteries: with larger capacities and faster recharge times, these batteries raise energy efficiency standards.
  • Solid-state batteries: offer greater efficiency, improved safety and reduced environmental impact.
  • Autonomous driving technology: promises to revolutionize transport, making it more efficient and safer.
  • Wireless charging for electric vehicles: an innovation with the potential to transform the charging infrastructure for electric vehicles.
  • Use of sustainable and recycled materials: the inclusion of recycled plastics, natural fibers and biodegradable compounds in vehicle manufacturing contributes to reducing the carbon footprint.
  • Alternative energy systems: hydrogen fuel cells stand out as a solution for long-distance travel, complementing electric batteries.


Competitiveness in international trade

In terms of international trade, sustainability is becoming a competitive advantage. The demand for cleaner, more efficient vehicles is growing and, along with it, export opportunities to demanding markets are also growing. 

The European Union, for example, is imposing increasingly strict limits on the import of combustion vehicles, which could result in non-tariff barriers for countries that don’t keep up with these developments.

In addition, the automotive industry’s supply chain is also undergoing a process of sustainability scrutiny. From the mining of lithium for electric car batteries to the recycling of components, concerning about the life cycle of products is becoming a strategic differentiator.

The automotive industry is therefore on the threshold of a new era, in which success is not only measured by sales, but by the ability to innovate responsibly and to insert itself into an increasingly discerning and regulated global market.