vehicle manufacturers fear power shortages

The president of Anfavea (National Association of Automotive Vehicle Manufacturers), Luiz Carlos Moraes, stated this Wednesday (8) that automakers are concerned about the impacts of the lack of rain on energy generation. The country is experiencing the worst drought in 90 years, which has been lowering the level of hydroelectric plants and forcing the activation of thermoelectric plants, which generate more expensive energy. According to specialists, the risk of blackout is not ruled out, and there is a need for rationing.

It’s already a concern, because more expensive energy increases the cost of production throughout the entire chain. It’s another element of price pressure. But the worst possible scenario is to stop production due to lack of energy. This worries a lot.
Luiz Carlos Moraes

According to Moraes, automakers have been following the scenario weekly, with information provided by the Ministry of Mines and Energy and also by energy traders.

We are hoping to make it through November [sem racionamento], and for it to have rain again. But we know that the challenge will not be just this year. We will have to continue monitoring in 2022.
Luiz Carlos Moraes

Consumption reduction program

In August, in an attempt to stimulate energy savings, the federal government launched a voluntary program to reduce consumption for industries. According to Moraes, Anfavea still does not have a survey of how many automakers will join the initiative, as the decision depends on each plant.

Companies are analyzing [a possibilidade], but it is an individual decision, factory by factory. Probably many will join, as it is an opportunity for companies to contribute [com a sociedade] and also have a reduction in costs.
Luiz Carlos Moraes

Voluntary programs and more expensive account

In addition to the program to reduce consumption in industry, the federal government also launched an initiative to encourage residential consumers to spend less. Both programs, however, are voluntary. Therefore, according to experts, they may be insufficient facing the critical situation faced by the electricity sector.

The lack of water also made energy more expensive, as thermoelectric plants had to be activated to meet the demand. In the case of residential consumers, the price increase is being passed on through tariff flags. Since the beginning of September, the water scarcity flag has been in effect, which adds R$ 14.20 to the bill for every 100 kWh consumed.

Missing pieces

The increase in electricity costs joins other challenges faced by the automotive industry. With the pandemic, parts are missing for automakers, especially electronic components.

According to a balance released by Anfavea on Wednesday, there were total or partial stoppages at 11 factories in August due to the lack of parts. Last month, vehicle production was 164,000 units – a drop of 21.9% compared to the same period last year. The result is the worst for an August since 2003.