Increase in import tax on electric vehicles in Brazil: A system dynamics prediction of impacts on EV adoption.

This paper aims to analyze the potential effects of a 35% increase in import taxes on the electrification process in Brazil. Utilizing system dynamics (SD) models, the study helps to identify whether this measure would delay the development of electric mobility by reducing demand and sales due to higher prices, or if the adoption of electric vehicles (EVs) technology would remain largely unaffected. The Bass diffusion model is implemented to evaluate these scenarios. Three scenarios were simulated until 2050 to evaluate the behavior of the Base scenario (35% of import tax), Scenario 1 (0% of import tax), and Scenario 2 (65% of import tax). The main outcome of this study is the prediction that the 35% import tax on electric cars does not deter purchases, as evidenced by the unchanged number of new adopters. This suggests that the increase in electric car adoption in Brazil is unaffected by this tax implementation. Consumers’ decisions to adopt EVs are not highly sensitive to price changes induced by import taxes. The role of consumer education on the benefits of EVs, improvements in charging infrastructure, and the influence of societal trends towards sustainability could provide a more comprehensive view of what drives EV adoption.