Politics ABVE, ANFAVEA, ASIA, AUTOMOTIVE INDUSTRY, BRAZIL, BRAZILIAN ASSOCIATION OF ELECTRIC VEHICLES, BRAZILIAN LABOUR AUTHORITY, BYD, CHINA, EXPORTS, FORD, INTERNATIONAL TRADE, INVESTMENTS, MEXICO, NORTH AMERICA, REUTERS, SOUTH AMERICA, TARIFFS Omar El-Sharif June 25, 2025 0 Comments

BYD Surges Electric Vehicle Shipments to Brazil Ahead of Tariff Hikes

BYD significantly increases electric vehicle exports to Brazil as it faces imminent tariff hikes. The Brazilian market sees a surge in EV sales, but local automakers express concerns about BYD’s commitment to establishing production facilities. Complications have arisen following labor abuses at a plant site, delaying production timelines. Other Chinese manufacturers like GWM are also trying to navigate the complexities of the Brazilian market.

BYD is significantly increasing its electric vehicle exports to Brazil ahead of looming tariff hikes, as reported by Reuters. The Chinese automaker is shipping a record number of vehicles amidst uncertainty surrounding its production plans in the nation. Brazilian sales of electric and hybrid vehicles are rapidly climbing, projected to jump 85 percent in 2024, breaking 170,000 units, according to the Brazilian Association of Electric Vehicles (ABVE). BYD, in particular, saw its sales in Brazil soar by an astounding 328 percent in the previous year, totaling 76,713 units.

However, the tariffs that initially attracted BYD to Brazil in 2015 are poised to change. Imported electric vehicles, which enjoyed an initial tariff-free status to boost adoption, will soon face progressively increasing tariffs beginning at 10 percent in January 2024 and potentially reaching 35 percent by July 2026. Currently set at 18 percent, the initial tariff will increase to 25 percent in July, while the Brazilian auto manufacturers’ lobby, Anfavea, is pushing for an even swifter increase.

The Brazilian auto industry anticipates a nearly 40 percent boost in exports from Chinese automakers this year, projecting around 200,000 vehicles into the market. According to Reuters calculations, BYD has already dispatched roughly 22,000 vehicles to Brazil this year, deploying the largest car-carrying ship on record last month as part of its strategic shipping effort. Importing vehicles earlier this year allows BYD to utilize a government policy that permits toll-free imports for certain electric vehicle types until July 2025.

Yet, while consumers might be willing to embrace these more affordable electric cars, local automakers express concerns that the increase in imports signals a retreat of BYD from establishing its production base in Brazil. The company’s purchase of a former Ford plant in 2023 hit some major hurdles earlier this year, when labor authorities rescued numerous construction workers from deplorable conditions at the site. Although BYD condemned the contractor and severed ties, the legal implications of this situation have caused further delays, pushing back its production timeline to December 2026.

Anfavea president Igor Calvet commented on the situation, emphasizing the importance of local production and technology. “We support the arrival of new brands in Brazil to produce and promote job creation,” he stated, but expressed worry about the risk of an excessive influx of imports detracting from local investment. He also noted that there have been no signs of local supplier partnerships or contract developments pertaining to the BYD plant, alluding to a lack of expected activity 18 months before production starts.

In contrast, fellow Chinese automaker GWM—having acquired a factory in Brazil in 2021—is set to kick off production of its hybrid Haval H6 SUV next month. GWM’s director of government relations, Ricardo Bastos, explained that while the company is negotiating contracts with around 100 local suppliers, the necessary infrastructure for component production remains absent in Brazil. The situation underscores the challenges faced by foreign automakers trying to establish a foothold in the Brazilian automotive landscape.

In conclusion, BYD’s surge in vehicle exports to Brazil ahead of impending tariff hikes highlights both the urgency for the company and the broader shifts in the automotive market. As Brazilian sales of electric vehicles grow sharply, concerns abound regarding the implications for local production and jobs. The COMPANY faces mounting scrutiny amidst delays in its production plans and labor issues, raising significant questions about its future viability in Brazil.

Original Source: macaonews.org