Consumers who have followed recent launches have noticed that vehicles equipped with 1.0 turbo engines present powers of 115 or 116 hp. This decrease in power is not aimed at reducing emissions or consumption, but is part of the tax incentives offered by the Federal Government for the industrial program called Green Mobility and Innovation (Mover).
The revised method for calculating the Tax on Industrialized Products (IPI) for automobiles considers several elements, such as the index of recyclable components, the presence of hybrid systems, flex or ethanol engines, in addition to the vehicle's power. The more aligned the model is with environmental criteria, the lower the applied rate will be.
The base IPI rate for automobiles is established at 6.3%, which may undergo adjustments of a few percentage points depending on the mentioned factors. There was also a significant change by no longer considering engine displacement in the tax calculation. The old tax benefit granted to cars with 1.0 engines, which manufacturers recently benefited from thanks to turbo technology, has been abolished.
In place of this factor, engine power has been adopted, creating four distinct categories for the application of reduced taxation. Since there is no increase in IPI for engines up to 115.6 hp, automakers opted to reduce the power of their 1.0 turbos throughout 2026.
Chevrolet was a pioneer in this change, updating its model in early 2025 to generate 121 hp with ethanol, but later reduced the power by 6 hp to achieve a lower tax burden. Hyundai implemented a similar measure in the i20, which shares engine technology with the HB20 and Creta; however, in the new compact, the maximum power was adjusted from 120 hp to 115 hp, and this modification will extend to other vehicles equipped with the 1.0 TGDI.
More recently, Stellantis reduced the power of its 1.0 turbo from 130 hp to 116 hp (rounded value of 115.6). The torque remained stable at 20.4 kgfm, with the change only impacting the peak maximum power.
Power cuts also affected larger displacement engines. According to Auto Esporte magazine, the Caoa Chery 1.5 turbo now delivers 143 hp, while the same manufacturer's 1.6 turbo had its power reduced from 187 hp to 180 hp. Another affected 1.6 turbo engine was the one in the Hyundai Creta, which dropped from 193 hp to 176 hp after being introduced in Brazil and becoming flex. At Volkswagen, this adaptation was made using the 170 TSI of 116 hp in the Polo, Taos, and certain versions of the Virtus.
The Renault Kardian's 1.0 turbo is also subject to power loss, dropping from 125 hp to about 115 hp, without compromising the 22.5 kgfm torque. Naturally aspirated models, such as the national line from Honda and the Toyota Yaris Cross, should not suffer changes.
For flex vehicles exceeding 115.6 hp, there is an alternative to obtain IPI discounts through the adoption of electrification. A plug-in hybrid system grants a 2% reduction, a full hybrid offers a 1.5% discount, and mild hybrids have a 1% reduction in the tax.
Stellantis intensified the offering of its MHEV systems, exemplified by the launch of the Jeep Avenger, which arrived exclusively with electrified powertrains. Both Chevrolet and Volkswagen have already announced plans to offer cars with this mild electrification, using 48-volt technology. Renault is developing a more sophisticated 48-volt mild hybrid system for the Boreal and the Niagara pickup, which uses an electric motor to drive the rear axle, a scheme already present in European Dacia vehicles, promoting greater fuel economy.
Quatro Rodas magazine reported that Honda is working on a mild hybrid system for the 1.5 naturally aspirated engines in the City, HR-V, and WR-V models. This would be a novelty for the brand, which currently only offers full or plug-in electrification options.
This modification in the IPI calculation methodology for Brazilian cars promises to transform the market in the coming years. Consumers should be prepared for the growing variety of 115 hp models or future mild hybrid launches by 2030.