Brazilian development bank Bndes is financing automaker Volkswagen's transition to electric vehicles (EVs), aiming to boost exports from the automaker's factory in the country.
Bndes has approved a R2.3bn ($427mn) loan to Volkswagen Brazil to accelerate the company's development of EV technologies, the bank said. The automaker will focus on developing and manufacturing flex-fuel hybrid vehicles — meaning they can be fueled with either gasoline or ethanol — skipping fully electric cars to make the most out of Brazil biofuels' potential, Bndes said.
Every vehicle developed and manufactured by Volkswagen in South America will be electrified "at some capacity" as soon as 2026, Volkswagen Brazil's chief executive Ciro Possobom said.
Volkswagen has no EVs in its Brazilian fleet. EV demand in the country is at an all-time high. Still, Volkswagen is the best-selling brand in the country.
The funding will also help develop advanced driver-assistance systems and infotainment technologies, features that are a staple in Chinese EVs, which are rapidly gaining popularity in Brazil.
Bndes also wants to boost exports of Brazil-made Volkswagen vehicles and further integrate Brazil into the global auto supply chain. Volkswagen Brazil has exported 4.4mn vehicles to 147 countries since 1970. The brand's 2025 exports grew by 43pc from a year before.
