China Inundo Brazil with cheap electric cars – 19/06/2025 – Market

The largest car transport ship in the world – equivalent to 20 vehicle football fields – completed inaugural trip at the end of last month by giving the port of Itajaí, Santa Catarina.

But not everyone is applauded the arrival of the vessel.

BYD, the world’s largest electric car assembler, is offering Brazilian buyers relatively low in a market where car movement was considered “green” is still in the beginning.

Representatives of the Brazilian automotive industry and labor leaders fear that BYD’s large flow of cars and other Chinese automakers affect national production and impairs jobs.

BYD has implemented a growing fleet of load ships to accelerate its expansion abroad, with Brazil becoming its main target, according to the analysis of the company’s transport and statements reuters. The loading of late May was the fourth of the automaker to arrive in Brazil this year, totaling about 22,000 vehicles, according to Reuters calculations.

BYD is the largest among the various Chinese brands that want to grow in Brazil. The market estimates that imports of vehicles manufactured in China grow almost 40% this year, to about 200,000, according to Brazil’s main automotive association, Anfavea. This will represent a share of about 8% in total light vehicle sales in the country.

Industrial and labor groups say that China is taking advantage of temporarily lower tariff barrier to increase its exports to Brazil, rather than investing in the construction of Brazilian factories and job creation. These groups press the government to anticipate from mid -2026 for this year to increase import tax from 10% to 35%, in the case of electric cars, instead of maintaining the current gradual raising policy.

“Countries around the world started closing the doors to the Chinese, but Brazil did not,” said Aroaldo da Silva, a worker of Mercedes-Benz production and president of Industriall Brasil, a confederation of six industrial sectors. “China took advantage of it.”

BYD, which is building a car factory in Camaçari, Bahia, did not respond to a request for commentary on industry concerns.

Brazil has emerged as a critical point in the global expansion of the Chinese automotive industry. An increasing surplus of new cars being pumped out of Chinese factories has led to an export boom in the last five years, helping China surpass Japan in 2023 to become the largest vehicle exporter in the world. Much of this excess is being sent abroad to markets such as Europe, Southeast Asia and Latin America.

Brazil is an attractive destination due to its large market: it is the sixth largest volume car market in the world.

Meanwhile, BYD’s path to growth elsewhere has narrowed both in the domestic and abroad. In China, BYD is involved in a price war that led it to reduce the value of the basic Seagull model to less than $ 10,000, reducing profit margin.

Abroad, governments have created rigid commercial barriers to Chinese cars, including a 45.3% rate in Europe and a tariff of over 100% in the United States, as well as the ban on Chinese cars.

For years, Brazilian authorities have taken steps to protect the market from unrestricted access from Chinese automotive companies. But Brazil’s current reaction has been slower and less aggressive than other nations.

In 2015, Brazil eliminated tariffs on electric cars to stimulate technology adoption in the country, but last year reintroduced a 10% rate on the segment to encourage investment in the national automotive sector.

The Ministry of Development told Reuters that an Anfavea request and others to anticipate the 35% tariff imposition is being analyzed.

“The schedule for the gradual resumption of rates, with decreasing quotas, has been established to allow companies to continue their development plans and respect the maturity of production in the country,” added a ministry spokesman.

BYD’s export strategy depends on the automaker’s ability to continue increasing shipments without causing resistance from local authorities. But representatives of the sector in Brazil are increasingly concerned with BYD’s plans to start Brazilian production being postponed.

In 2023, government officials applauded the BYD plan to buy the Ford factory in Camaçari. But an investigation on labor abuse in the construction site postponed the “totally functional” production schedule for December 2026, local authorities said in May.

Another Chinese automaker, GWM, also delayed its plan in more than a year to start setting up cars at a Mercedes-Benz factory in the interior of Sao Paulo. The government expects the factory to start operating this year.

“We support the arrival of new brands in Brazil to produce, promote the component sector, create jobs and bring new technologies,” Igor Calvet, president of Anfavea, told Reuters. “But from the moment an excess of imports causes a lower investment in production in Brazil, it worries us.”

Da Silva, from Industriall, said his union confederation did not hear about any relationship with local suppliers being developed or contracts being signed to the BYD factory, as would normally be expected at 18 months from the beginning of production.

“Even if the factory is here, what value does it really add if the components, development and technology are all foreigners?” Said Silva.

BYD did not respond to a comment request for your supplier network.

The government of President Luiz Inacio Lula da Silva organizes the Global COP30 Climate Summit in November in Belém.

But the nascent movement of “green” car cars in Brazil depends on Chinese imports, which account for over 80% of electric car sales in the country, according to the Brazilian Association of Electric Vehicles, ABVE.

Brazil has abundant mineral resources, including lithium and other essential ingredients for the manufacture of batteries for electric vehicles. But the infrastructure to produce all the necessary components for electric cars do not yet exist, Ricardo Bastos, director of government relations at GWM Brazil and president of ABVE.

GWM, which bought Mercedes-Benz Brasil’s car factory in 2021, with a capacity of 50,000 vehicles a year, should start producing the Haval H6 model in July this year. The automaker is in negotiations with about 100 Brazilian suppliers to establish contracts, Bastos told Reuters. “This year, imported cars will coexist with cars produced in Brazil,” said Bastos.