Opportunities for funding innovation projects in the automotive sector in Brazil

After the publication of several laws that helps to enhance innovation, research and cooperation as for example Law of Innovation (2004), Law of Good (2005), finally in the end of 2018, the Law 13755/18 or Rota 2030 was launched. It is a new industrial policy for the automotive sector. The program provides incentives for local companies that improve fuel efficiency, vehicular safety or invest in research and development in somewhere in the chain. Other important areas that will be funded are: mobility, logistic and sustainability.

Rota 2030 program will run for 15 years and will provide tax credits over the next five years with an estimated value of total 2.1 billion BRL in 2019 and 1.5 billion BRL in 2020. In short, the main objective of this new incentive is to grant of up to R$ 1.6 billion per year of tax credit to the industry, if the participating companies of Rota 2030 invest at least R$ 5 billion per year in research and development.

What is also interesting to notice is that this incentive also covers the sector of auto parts and strategic systems, and thereby not is limited to car producers only.

MCTIC representatives explaining about Rota2030 at the European Delegation. Photo: Office of Science and Innovation Brazil.

Creation of a Fund

Another important point is that the law enables importers in this sector to deposit 2 percent of the import taxes in a Fund of Priority Projects and Programs (PPP). It is estimated that these resources can reach an annual value of 70 to 100 million BRL (17-25 million USD). With that scenario and considering the capacity for research and development in these areas, a saturation point (all researchers full occupied with projects) will be reached already within 4 years, if not the international collaboration increases significantly.  Therefore, international cooperation will be playing a relevant role in raising the scientific and technological knowledge in Brazilian, especially in ICT connected to the automotive sector.

The Fund will be managed by several institutions from the Government, Academic sector and Industries. They will together define the themes where funding can be applied. The themes selected so far are: Industry 4.0; Connectivity; Strategic Systems; Strategic solutions for mobility and logistics; New technologies in propulsion or vehicle autonomy and its auto parts; development of tools, molds and models; nanotechnology; bid data; analytical and predictive systems and artificial intelligence. New themes can be added if the industry find it relevant. The fund can be accessed in two different ways, either by open calls or by projects proposed directly by the industry itself.

Objectives of Rota 2030

The main objectives of Rota 2030 are to: Increase energy efficiency, structural performance and the availability of assistive technologies; Increase investments in R & D in Brazil; Stimulate the production of new technologies and innovations; Automate the manufacturing process and increase productivity; Promote the use of biofuels and alternative forms of propulsion and valorize the Brazilian energy matrix; Ensure technical training and professional qualification in the mobility and logistics sector and; Ensure the expansion or maintenance of employment in the mobility and logistics sector.