In 2020, the automotive market was drastically affected by the worldwide COVID-19 pandemic. Production that year fell by more than 15%, while sales were down by more than 8% from the preceding year.
However, for the year 2021 there is a prospect of growth in the number of global vehicle sales, with an estimated 70 million units to be sold by the end of the year. Electric vehicles (including plug-in hybrids) have been the driving force behind this increase. These are likely to make up 6%-8% of the global market in 2021, after already having reached a 4.4% share in 2020 and a 2.5% in 2019[1], as informed in the article “Global Auto Sales Forecasts: The Recovery Gears Up” (S&P Global Ratings, May 11, 2021).
Brazil is the 9th largest vehicle producer in the world. Despite the drastic drop in the global number of vehicles sold in 2020, Brazil was ranked 7th among the countries with the highest number of vehicles sold that year, rising one position from 2019. Such numbers demonstrate the importance and prominence of Brazil in the automotive market. The Brazilian market is well balanced between vehicle exports and imports. In 2020, the amounts spent on imports and exports were practically the same, showing how Brazil is well inserted in the global automotive market.
Focusing specifically on Electric Vehicles in Brazil, the growth in the number of sales has been substantial. In 2020, sales increased by more than 66% compared to 2019[2], according to the Brazilian Electric Vehicle Association (ABVE).
The diffusion of the Electric Vehicles can also provide new economic activities, such as in the battery and software industries, as well as in new business models exploring Car as a Service (CaaS) activities. As pointed out by Adalberto Maluf, the President of the ABVE, in an interview for the Exame Magazine website[3] “in Mercosur, there is the largest reserve of lithium in the world and, in Brazil, we have rare minerals for manufacturing batteries and electronic components”. This shows how Brazil can play a leading role in this sector.
Patent analysis
When examining patents relating to Electronic Vehicles, it becomes clear that battery-related technologies are as important as the cars themselves, with special attention being given to innovations related to lithium and other rare minerals, ranging from their extraction to their recycling processes.
In terms of patents for Electric Vehicles and batteries, the number of patent filings in the world[4] has been growing in recent years to a figure of 11,592 (7,000 just for batteries) in 2018 and 7,756 (6,387 just for batteries) in 2019, as reported by inQuartik. In Brazil[5], 234 (200 just for batteries) and 162 (135 just for batteries) patent applications were filed in 2018 and 2019 respectively in the Brazilian Patent Office (“Instituto Nacional da Propriedade Industrial”). It is important to note that patent applications filed in 2019 are only being published now, due to the secrecy period of 18 months.
The biggest investors in Electric Vehicles are in Europe and Asia. According to inQuartik, the top 3 patent filers in the sector are Toyota, Hyundai, and Bosch. Considering that this is a technology with recent investments in comparison to the fossil fuels technologies, Brazil still represents a small portion of patents related to EV in the global scenario. However, there are clear examples demonstrating that automotive companies see the potential for Electric Vehicles in Brazil. For example, Toyota filed a patent application related to the Corolla hybrid system in Brazil[6], and Valor International magazine[7] reported in July 2021 that Volkswagen decided to transform Brazil into a research, development, and production center for hybrid vehicles.
Batteries
Technological developments in batteries encompass different industry sectors in addition to the automotive industry (for example, the mining, metallurgical, and chemical segments) and Brazil has great potential in this area.
An article in the journal Nature Research, published in August 2021, Electric cars and batteries: how will the world produce enough?[8], stated that “Reducing the use of scarce metals — and recycling them — will be key to the world’s transition to electric vehicles”. Recycling batteries components, especially metallic elements, is a critical issue and technologies for this process are still in initial stages. Different types of batteries, such as lithium-ion and lithium iron phosphate cells, are being developed, but separating the metals contained is one of the obstacles in the recycling process.
In April 2021, Automotive Business[9] announced that the Brazilian metallurgical multinational TUPY S.A. and the University of São Paulo (USP) have joined forces to create a solution to the recycling problem. This partnership has an initial investment of R$ 4 million to develop a technology for recycling lithium batteries. This is aligned not only with the international concern about Electric Vehicles and batteries environmental matter, but is also an illustrative case of the remarks by the ABVE President above.
Therefore, we can see that technologies related to batteries are very relevant to innovation related to Electronic Vehicles and for EV markets, including in Brazil.
In summary, the global perspective of patents for Electronic Vehicles shows that the market is seeing increasing investments in this segment, in line with government agendas around the world. Further, electric mobility is increasingly being seen as an important resource to decarbonize the energy and transport sectors and mitigate climate change (IEA, 2020).
In a recent study on the future of Electronic Vehicles in Brazil (2020)[10] published on the Nature Research website (Behavioural and Social Science), it was found that most of the sector’s stakeholders agree that “… if Electronic Vehicles get government incentives, they will account for up to 20% of the market share in Brazil by 2030”. In this regard, the Brazilian government launched a tax incentive program for the automotive sector in 2018, and there is also a bill pending in the Brazilian Congress seeking to reduce the tax on electric or hybrid vehicles. Such initiatives boost the projects in progress and also bring more investments in research and development to related technologies in Brazil, which consequently generate more patents filed in Brazil and more Brazilian companies patenting their solutions.
Going forward, and to maintain such strong growth, it will be extremely important to guarantee protection for innovations in the Brazilian automotive industry, as European and Japanese companies are already doing by patenting their developments, so as not to end up at a competitive disadvantage to other countries.
[1] https://www.spglobal.com/ratings/en/research/articles/210511-global-auto-sales-forecasts-the-recovery-gears-up-11952032, accessed on 6/16/2021
[2] http://www.abve.org.br/2020-o-melhor-ano-da-eletromobilidade-no-brasil/ (ANFAVEA/RENAVAM/ABVE)
[3] https://exame.com/negocios/presidente-da-abve-se-nada-for-feito-nao-havera-industria-automotiva/, accessed on 6/16/2021
[4] https://www.inquartik.com/blog/trends-electric-vehicle-patent-trends-chassis/#t7, accessed on 7/19/2021
[5] Fonte: INPI (IPCs: B60L, B60W, B60K 6/00, H02J 7/00, H01M)
[6] https://mundodoautomovelparapcd.com.br/toyota-registra-patentes-do-novo-corolla-cross-no-brasil/, accessed on 8/29/2021
[7] https://valorinternational.globo.com/business/news/2021/07/11/volkswagen-to-turn-brazil-into-center-of-excellence.ghtml, accessed on 8/29/2021
[8] https://www.nature.com/articles/d41586-021-02222-1, accessed on 8/29/2021
[9] https://www.automotivebusiness.com.br/noticia/32888/tupy-e-usp-fecham-parceria-para-reciclagem-de-baterias, accessed on 8/29/2021
[10] https://socialsciences.nature.com/posts/the-future-of-electric-vehicles-in-brazil, accessed on 6/16/2021
Article published on The Brazilian Report.