On July 10, 2025, Brazilian President Luiz Inácio Lula da Silva signed a decree establishing a new tax policy aimed at promoting sustainable vehicles. The decree reduces the Imposto sobre Produtos Industrializados (IPI) for cars that are lighter, more economical, powered by clean energy, and meet recycling and safety standards. Notably, the government introduced a zero IPI rate for domestically manufactured sustainable cars under the new "Carro Sustentável" (Sustainable Car) program. This initiative is part of the broader MOVER and Nova Indústria Brasil programs and is designed to stimulate innovation and sustainability within the automotive sector while supporting environmental and social benefits. The Ministry of Development, Industry and Foreign Trade (MDIC) emphasized that the policy encourages reduced pollution and energy consumption without increasing the overall tax burden. Automakers are required to register to qualify for the incentives, and the measure is expected to boost sales of less polluting vehicles and contribute to the national economy.