Volkswagen starts to produce Electric Trucks in Brazil

Volkswagen announced that will produce electric trucks in Brazil, joining to other two automakers in the country.

Volkswagen chose Brazil for the production of the e-Delivery model, a fully developed electric truck, according to a press release of the company. This electric truck can reach 200 km without recharging the battery. 

Volkswagen invested $30 million to adapt the factory for producing the e-delivery, in a heated moment for EVs. The company joined to other three companies that are manufacturing electric trucks in Brazil.

How is the e-Delivery model that will be made in Brazil?

The e-delivery began to be developed four years ago and its launch is in keeping with the good moment in truck sales and with the appreciation of the ESG principles in the country. The e-Delivery model is an 11-ton (4×2) model with an even larger 6×2 (six support points for two traction axles) that must also be manufactured. Today, the e-Delivery has a range of 200 km without needing to recharge the battery.

The company is expected to manufacture around 100 units in 2021, to deliver 1,000 units next year and 3,000 per year by 2023, with 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 automaker believes that it will be possible to conquer other customers focused on the delivery of goods in urban regions, such as wholesalers and retailers. 

EV’s: An green investment

Volkswagen invested around $ 30 million (R$ 150 million) to adapt the factory in Rio de Janeiro to manufacture the launch. Despite the new model should cost about 2.7 times the value of a truck with a combustion engine, the total operating cost of owning an electric vehicle is 60% less than that of a diesel-engined truck, making it more attractive and payback in about a year. According to Volkswagen spokespeople, the electric motor requires much less maintenance than the combustion engine. 

Given this potential and projecting future needs of the Brazilian market, the company claims 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 towards this end in the coming years.

Opportunity in EVs for Brazil

According to data from Anfavea (Associacao Nacional dos Fabricantes de Veículos Automotores), between January and April this year, 35,862 trucks were licensed, an increase of 48% over the same period in 2020 — and 19.5% over the period from January to April 2019. 

Roberto Cortes, CEO of Volkswagen in Brazil, expects to manufacture 10,000 units a year. Everything depends on the demand for this model. 

Even projecting high demand, the automaker is already aiming to reduce the price over the next few years with the gain of scale and, mainly, with the nationalization of the production of batteries – which account for the higher cost of manufacturing the e-Delivery. Today, this component is imported from the Chinese manufacturer Contemporary Amperex Technology (CATL) and, to make it cheaper over the next few years, the automaker promoted a meeting between the Chinese and Brazilian Moura, who signed an agreement. As a result, over the next few years, Moura will import lithium and apply all other battery components nationally, making the product cheaper for Volkswagen. 

Challenges for electrification in Brazil

The main difficulty faced is to overcome the challenge of traveling long distances with trucks in Brazil — the time to load them, for example, is still a disadvantage compared to combustion engines. But, the growing demand for sustainability has made assemblers invest more and more in this trend.

According to the Volkswagen executive, the company plans to start in urban regions, which have more infrastructure for charging stations and, little by little, migrate to trucks capable of going ‘from Oiapoque to Chuí’”.

In addition to Volkswagen, at least two other automakers have electric trucks in Brazil: FNM-Agrale and Chinese company Jac Motors. In February, the Chinese automaker announced that its 7.5-tonne model has a range of up to 250 kilometers if the driver does not use the air conditioning.

In the case of the Chinese automaker, more than 100 units of the iEV1200T have been sold since April. Until now, several companies have been interested in purchasing the iEV1200T in small initial batches, anticipating, after a few months of use, purchases of much larger volumes.

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