Alessandro Parodi and Victoria Waldersee
(Reuters) – The world’s largest car carrier – the equivalent of 20 football stadiums – completed its virgin trip late last month to dock in Brazil’s Itajai port.
But not everyone is cheering for it.
Byd, the top producer of electric and plug-in hybrid vehicles in China, offers Brazilian shoppers a relatively low-priced option in a market where green car sport is still in its infancy. Brazilian auto industry officials and labor leaders worry that a large number of cars from Bied and other Chinese automakers will resume domestic auto production and damage work.
According to Reuters’ analysis of transportation data and company statements, Bied has deployed more and more cargo ships to accelerate its overseas expansion targets. The cargo in late May is the fourth ship to be docked in Brazil this year, with a total of about 22,000 cars, according to Reuters’ calculations.
Byd, the world’s highest producer of electric and plug-in hybrid vehicles, is the largest of several Chinese brands targeting Brazil’s growth. Imports of automobiles made in China are expected to grow nearly 40% this year to about 200,000, according to Brazil’s major auto associations. This will account for 8% of the total light vehicle registrations.
Industry and workforce groups say China is taking advantage of Brazil’s temporary low tariff barriers to increase exports rather than investing in building Brazil’s factories and creating jobs. They are lobbying the Brazilian government to accelerate a year-on-year plan to increase tariffs on all Brazilian electric vehicle imports from 10% to 35%, rather than gradually phase out the higher levies.
“All around the world began to close China’s doors, but Brazil did not,” said Aroaldo da Silva, a Mercedes-Benz production worker and CEO of Industrial Brasil. “China took advantage of this.”
Byd did not respond to requests for comment to the industry’s concerns.
Extra car
Brazil has become a flash point for the huge global expansion of China’s automobile industry. Over the past five years, the surplus of new cars drawn from Chinese factories has led to a boom in exports, helping China become the world’s top vehicle exporter through Japan in 2023. Much of this surplus is shipped to markets such as Europe, Southeast Asia and Latin America.
Thanks to its large market, Brazil offers an attractive destination – it is the sixth largest auto market, with mature players including Volkswagen, General Motors and Jeep maker Stellantis having built cars at home for decades. The Brazilian government has formulated policies aimed at continuously increasing the sales of electric and plug-in hybrid vehicles.
Meanwhile, both at home and overseas, Byd’s growth path has narrowed elsewhere. At home, the company is trapped in a bruised price war that cuts its entry-level seagull’s price to under $10,000, squeezes out profit margins.
Abroad, the government has set up strict trade barriers for Chinese cars, including 45.3% responsibilities in Europe and more than 100% tariffs in the United States, as well as bans on Chinese software in cars.
Over the years, Brazilian officials have taken steps to protect the market from unrestricted access by Chinese auto companies. However, the response rate is slower than that of other countries.
In 2015, Brazil lifted tariffs on manufacturers such as Byd, but last year it reintroduced a 10% tariff on electric vehicles to encourage investment in the domestic auto industry. The tariff plan is increased every six months and then reaches 35% in 2026.
Brazil’s Ministry of Development, Industry and Foreign Trade told Reuters that the Brazilian Automobile Association, Anfavia and others’ demands for raising higher tariffs are under review.
A ministry spokesman added: “A timetable for gradually resuming tariffs was established to reduce quotas to allow companies to continue developing plans and respect the maturity of the country’s manufacturing industry.”
BYD and other Chinese companies have also taken advantage of a policy from Brazil that enables them to import electricity bills at plug-in hybrid vehicles imported in July 2025 and $226 million in battery power, and use battery-electric vehicles. This inspires pre-cargo volumes for vehicles to fully benefit from free quotas before expiration, analysts said.
“Too much import”
BYD’s export strategy depends on the ability of automakers to continue producing goods without triggering resistance from local authorities. However, Brazil’s industry representatives are increasingly worried that Byd’s plan to start domestic automobile production has been delayed.
In 2023, government officials cheered on Byd’s plan to buy the former Ford factory in Bahia, seeing it as a way to create manufacturing jobs and stimulate the country’s green transition. But local officials said in May that an investigation into labor abuse on construction sites delayed its “full-functional” production schedule until December 2026.
Another Chinese automaker, GWM, has also delayed it for more than a year, and the plan begins driving at the Mercedes-Benz factory. The Brazilian government expects the plant to start operations this year.
“We support the arrival of new brands in Brazil to produce, promote the constituent sectors, create jobs and bring new technologies,” Anfavea president Igor Calvet told Reuters. “However, the moment of excessive imports leads to lower production investment in Brazil, which concerns us.”
Da Silva of Industrialall said his union alliance has not heard of any local supplier relationships or contracts signed for the BYD plant, and is usually expected to be 18 months from the start of production.
“Even if the factory is here – if the components, development and technology are all from abroad, what value does it really add?” Da Silva said.
Byd did not respond to a request for comment on its supplier network.
President Lula Da Silva’s left-wing Workers’ government scrambles to protect work and the environment as it aims to restore Brazil’s industrial economy and restore its green certificate ahead of the COP30 Global Climate Summit this November.
Despite the Brazilian Electric Vehicle Association (Abve)’s statement, the country’s nascent green movement still relies on Chinese imports, accounting for more than 80% of Brazil’s electric vehicle sales.
The country has a wealth of mineral resources, including lithium and other major components to make electric electric batteries. But there is no infrastructure to produce all the necessary components for electric vehicles, said Ricardo Bastos, Brazil’s GWM’s director of government relations and president of ABVE.
Bastos told Reuters that GWM bought a factory in Brazil in 2021 that can accommodate 50,000 cars a year and will start producing its Haval H6 SUV in July this year, and he is in talks with about 100 suppliers who have contracted suppliers based in Brazil.
“This year, imported cars will coexist with cars produced in Brazil,” Bastos said.
(Victoria Waldersee’s report in Berlin and Alessandro Parodi of Gdansk; other reports in Fabio Teixeira of Rio de Janeiro; Editors of Mike Colias and Michael Learmonth)
