Companies like BYD and Great Wall Motor have global ambitions, a Brazil has become a key testing ground for many other major economies turning to protectionism. The country is the world’s sixth-largest automotive market, and success in Brazil could boost prospects across the region.
BYD is on track to surpass $100 billion in sales this year, and Brazil is playing a big role in that. This is the company’s largest foreign market.
Chinese electric vehicle sales in Brazil / Bloomberg
Chinese expansion
For the Chinese, the Country of Coffee has an advantage over other markets, such as the USA and Europe, which pose obstacles to Chinese production. Over the last decade, Brazil has exempted electric and hybrid cars by 35%. vehicle import tax. This opened up a market for Chinese automakers in a country of more than 200 million people.
BYD introduced its first cars in Brazil in 2021 and accelerated exports last year. With the cheapest model priced at just 115,800 reais ($19,100), it quickly gained a large market share.
Brazilian carmakers lobbied for the reinstatement of import taxes and ultimately found support from President Luiz Inacio Lula da Silva, who returned to power in January 2023. Lula’s government began to restore taxes a year later at 10%, with plans to gradually increase it to 35%. by mid-2026
In response to the announcement of the return of tariffs, BYD flooded Brazil with vehicles even before tariffs were introduced. At the beginning of November, the company’s director said that 35,000 tons remained in the ports. cars, which is approximately a four-month supply.
Automotive market share in Brazil by brand / Bloomberg
No charging station
According to data from the association of car manufacturers Anfavea, the share of electric cars in total car sales in Brazil almost doubled in January to 7%. compared to the previous year.
However, finding new customers willing to buy an electric vehicle in a country that is just starting to build a network of charging stations is becoming increasingly difficult. It must be remembered that Brazil is a huge country, so in addition to concerns about how far an electric car can travel on a single charge, the distances between large centers are huge.
The Chinese want to open factories in Brazil
BYD and Great Wall Motor plan to open factories in Brazil. For BYD, this is expected in March. On the site of the former Ford Motor Co. plant. BYD is investing 5.5 billion reais ($1.1 billion) and expects the plant to be operational within two years. produce 300 thousand cars per year.
Great Wall Motor, expects to begin operations in May at a former Daimler factory, as part of a plan to invest 10 billion reais ($1.6 billion) over about a decade.
Other Chinese companies have also recently announced plans to expand to Brazil, amid a wave of strong tax barriers in Europe and the US.
Europe strikes back
Volkswagen, Toyota and Renault, announced that they will invest over 100 billion reais ($20 billion) by the end of this decade. Most of the cash is to go towards developing hybrids, including flexible solutions that combine electricity with an internal combustion engine powered by gasoline and ethanol, a fuel produced locally from Brazilian sugar cane crops.
Stellantisthe owner of traditional brands such as Fiat, Jeep and Peugeot, plans to start selling EV models in Brazil from its Chinese partner Leapmotor early next year.
