BYD, China’s leading electric and hybrid automaker, is offering low-cost electric vehicles (EVs) in Brazil, a market where green car adoption is still just beginning. While customers benefit from cheaper options, Brazilian auto leaders and labor unions fear that Chinese imports could hurt local manufacturing and jobs.
According to Reuters, BYD has ramped up global shipping efforts, making Brazil its top destination. The company has sent four car shipments to Brazil this year alone, totaling around 22,000 vehicles.
China’s auto exports to Brazil are booming. Imports of China-made vehicles are expected to grow nearly 40% this year to 200,000 units — or about 8% of all light vehicle registrations. BYD is leading this charge.
However, industry groups argue that China is using Brazil’s temporary low tariffs to flood the market, rather than building factories and investing in local production. They’re urging the government to fast-track a tariff increase on EVs from the current 10% to 35%, originally set for 2026.
“Other countries shut their doors to Chinese cars. Brazil didn’t,” said Aroaldo da Silva, a union leader from IndustriALL Brasil. “China took advantage of that.”
China’s Global Car Surplus Lands in Brazil
China has become the world’s largest vehicle exporter, surpassing Japan in 2023. With a surplus of cars from factories at home, Chinese automakers are exporting more vehicles globally, including to Brazil, Southeast Asia, and Europe.
Brazil, the world’s sixth-largest car market, is attractive to global automakers. Established players like Volkswagen, General Motors, and Stellantis already manufacture locally. The Brazilian government has also introduced policies to encourage EV growth — aligning with BYD’s specialty.
Yet, BYD’s growth has stalled elsewhere. The company is facing fierce price wars in China, where its budget Seagull EV now sells for under $10,000. Abroad, it is battling stiff tariffs — 45.3% in Europe and over 100% in the U.S., plus bans on Chinese car software.
Brazil has been slower to respond. It removed EV import tariffs in 2015 to encourage green vehicles. In 2023, it reimposed a 10% tariff, with plans to increase it gradually to 35% by 2026. Industry groups are now pushing to speed up that timeline.
Meanwhile, BYD and other Chinese automakers are taking full advantage of Brazilian incentives that allow tax-free imports under certain limits. These policies expire in mid-2025, prompting a rush of imports to beat the deadline.
Local Production Delays Raise Red Flags
More than 80% of EVs sold in Brazil come from China. BYD had promised to build cars locally by converting an old Ford plant in Bahia. That plan was welcomed by officials as a path to jobs and green growth. But delays linked to labor violations have pushed back full production to late 2026.
Another Chinese brand, GWM, also postponed local production at a former Mercedes-Benz plant. The government now expects it to begin operations this year.
“We support new brands setting up in Brazil. But if imports prevent investment in domestic factories, that’s a problem,” said Igor Calvet, head of Brazil’s auto manufacturers association.
Union leaders like Da Silva are also skeptical. They say BYD hasn’t signed contracts with Brazilian suppliers — something that should be happening if production is 18 months away.
“What’s the value if the tech, parts, and development all come from abroad?” Da Silva asked.
Balancing Jobs and the Green Transition
President Lula’s government is in a difficult spot. It wants to revive local industry while promoting clean energy. Yet, with COP30 climate talks approaching, it must also show environmental progress.
China-made EVs currently power Brazil’s green car movement, making up the vast majority of sales. But Brazil still lacks the full supply chain to support a homegrown EV industry, even though it has rich deposits of lithium and other battery materials.
Ricardo Bastos, who leads GWM Brazil and the Brazilian EV association (ABVE), said GWM is working with about 100 local suppliers. The company plans to begin building its Haval H6 SUV in Brazil by July.
“This year, imported and locally made cars will exist side-by-side,” he said.
