In May, BYDiBYDBYD Auto is a Chinese carmaker that became the world’s leading EV manufacturer in 2023, competing with Tesla for market share and global attention.READ MORE’s largest car carrier arrived in Brazil with 7,300 new electric vehicles. The consignment, coupled with two other large shipments a few days later, represented the company’s biggest export operation to Brazil.

BYD, which recently overtook Tesla to become the top seller of EVs globally, made little fuss over its Brazil milestone. But the shipments were welcomed by Brazilians eager to beat rising tariffs on imported EVs.

Since its launch in Brazil in 2015, BYD has grown at a fast pace: Sales rose 327% between 2024 and 2023. The expansion is in large part due to the country’s zero-tax policy for EV imports. But the company’s future is uncertain as Brazil has implemented a progressive tax program for imported EVs, starting at 10% in January 2024 and expected to reach 35% by July 2026. The tariff, which is currently at 18% and rises to 25% next month, is backed by the powerful Brazilian automakers’ lobby.

Tax-free EV imports “favor ready-made imported cars that arrive in Brazil, distorting the logic and natural order of the Brazilian market,” Igor Calvet, president of Anfavea, an industry group that largely represents makers of gas-powered cars in Brazil, told Rest of World. “It takes away from automakers and their Brazilian workers all the potential they otherwise would have.”

BYD did not respond to questions from Rest of World on its sales strategy in Brazil.

Anfavea has said companies like BYD have an “unfair advantage” over local automakers, who face high operational costs and local levies. Under its pressure, the government is weighing the possibility of advancing the final tax implementation date to July, prompting consumers to flock to BYD dealerships before prices go up.

Luiz Fernando Suzarte, an electric engineer in Brasíilia, bought a BYD Song Pro earlier this year, ahead of the planned hike in tariffs in July. “There’s a certain rush to seize this window of opportunity,” Suzarte told Rest of World. “I took many test drives, looking for the most economical car, and between the most popular ones, BYD won for its cost benefits.”

327%

The 1-year rise in BYD sales

With its tax on imported EVs, Brazil is following the playbook of the U.S., which imposes a 100% tariff on Chinese EVs, and the EU, where BYD’s battery electric vehicles are subject to a 27% levy. But Brazil’s progressive tariff is an outlier in Latin America, where countries including Argentina, Costa Rica, and Colombia have reduced or completely eliminated EV tariffs in their push for clean energy.

The U.S. and Europe, with their established auto industries, are the top markets for EVs, according to a report from the International Energy Agency. But emerging markets in Asia and Latin America are adopting EVs at a faster pace. EV sales are expected to exceed 20 million units worldwide this year, with one of every four cars sold set to be electric. Chinese brands accounted for 10% of global EV and plug-in hybrid sales last year, according to energy transition consultancy Rho Motion. That figure is forecast to grow.

In Brazil, the number of imported vehicles sold rose by 18.7% between January and April, while sales of domestically produced vehicles grew 0.2%, according to data compiled by Anfavea. In March and April alone, the country’s automobile market grew 16% solely from the sales of imported cars, while the sale of locally made cars “practically stalled.”

With a goal to sell half its cars outside an increasingly competitive Chinese market, and under pressure to localize production in several countries, BYD is adding manufacturing and assembly units worldwide. But in Brazil, the company has faced several challenges. 

Last year, BYD began building a large manufacturing plant in Camaçari, a town synonymous for decades with Ford Motor. In December, authorities said they had found 163 people working in “slavery-like conditions,” and have since sued BYD for $45.3 million. The company recently announced it had pushed back its rollout of Brazilian-made vehicles from the middle of 2025 to the end of the year.

“What we want is that there’s no more delay in their beginning of [local] production,” Calvet said. The tax is meant to pressure the company into kickstarting its Brazilian operation. This will lead to job creation and subject BYD to the same tax requirements that other automakers in the country face, he said.

Brazil is the largest market for EVs in Latin America. A recent study from the Latin American Energy Organization, an intergovernmental body, estimates that half the EVs on the continent are in Brazil. By the end of 2024, more than 237,000 EVs had been sold in the country, with an annual growth of 187% compared to the previous year. The organization estimates the number of EVs in Brazil will reach close to 1 million by 2030.

Chinese EVs already account for as much as 90% of Brazil’s active electromobility fleet, according to a report from Oxford Energy Forum.

187%

The 1-year rise in EV sales in Brazil in 2024

Brazil is not just a significant consumer market but a huge producer as well. The main objective of the tariffs is “to stimulate local production, promoting a gradual nationalization of the country’s own supply chain for electromobility,” said Edgar Barassa, a researcher of electromobility and public policy at the University of Campinas in São Paulo.

“Brazil is at a crossroads,” Barassa told Rest of World. “Either it positions itself as a key actor in the emergent supply chains for electromobility and clean energy — generating jobs, innovation, and technological sovereignty — or it limits itself to import technologies, losing opportunity in a new global industrial cycle.”

In Vitória da Conquista, a northeastern state, solar-panel company owner Bruno Peter Cardoso recently created a local WhatsApp group for new EV buyers. There has been a spike in new members recently, said Cardoso, who bought a plug-in hybrid BYD in 2023. He would like to buy a fully electric BYD next.

“People are rushing to EVs because they are finally realizing how much better they are,” he said. “It changes your conception of things.”