Header photo source: BYD.
In late May, after about a month at sea, BYD Shenzhen, a car carrier named after the company, arrived at the Port of Suape in Brazil with more than 7,000 new vehicles. More than just the end of a long journey, its arrival signaled another step in the global expansion of Chinese electric vehicles.
Brazil, the world’s sixth largest automotive market, is emerging as a key destination for China’s growing new energy vehicle (NEV) exports. The country’s increasing demand and its role as a gateway to Latin America have made it a strategic launchpad.
According to the Brazilian Electric Vehicle Association (ABVE), EV sales in Brazil reached 177,360 units in 2024, a 90% year-on-year (YoY) increase. Between January and May 2025, the top three destinations for Chinese NEV exports were Belgium (119,678 units), Brazil (105,513), and Mexico (84,862), per the China Passenger Car Association (CPCA).
Among China’s automakers, BYD has built a commanding position in Brazil. It leads the country’s battery-powered EV (BEV) market and is rapidly gaining ground in plug-in hybrid EV (PHEV) sales. In 2024, BYD sold 76,713 vehicles in Brazil, representing more than a 300% YoY increase. In May alone, Brazil recorded 6,969 BEV sales, and BYD accounted for 5,596 of them, or more than 80% of the total.
That momentum, however, now faces new hurdles.
For years, Brazil exempted EVs from import tariffs. That policy shifted in 2023, when the Ministry of Development, Industry, Trade and Services (MDIC) announced a phased reintroduction of tariffs on BEVs, PHEVs, and hybrid EVs (HEVs), beginning in 2024. The rate is set to reach 35% by July 2026.
The next tariff increase is scheduled for this July: BEVs will be taxed at 25%, HEVs at 30%, and PHEVs at 28%. That timing may help explain the recent arrival of BYD Shenzhen.
The approaching tariff hikes are already shaping export strategies. Since last year, Chinese automakers have increased shipments to stay ahead of the tax changes. In the first half of 2024, Brazil imported more than 62,000 EVs from China, which made up 91.4% of the country’s total EV imports during that period.
But shipping finished vehicles is just one part of a broader play. The longer-term competition will unfold in Brazil’s domestic market.
Beyond tariffs, Brazil’s government introduced a green mobility and innovation program in 2024 to encourage local manufacturing. The initiative aims to revitalize the country’s car industry and attract foreign investment. Global companies like Toyota, General Motors, and Stellantis have already expanded their presence. China’s key players including BYD, GAC Group, Great Wall Motor (GWM), Chery, and Geely are also investing locally and planning production facilities.
- In May, GAC outlined its Brazil strategy, which includes launching five models and targeting 100,000 sales over five years. It has committed to investing BRL 6 billion (USD 1.1 billion) and aims to open a factory by the fourth quarter of 2026.
- GWM plans to open its first Brazilian plant this year, starting with an annual capacity of 50,000 vehicles across three models. It intends to double that to 100,000 units to serve the wider LATAM market.
- BYD is developing a large, three-factory complex in Camacari, first announced in 2023. Production was originally scheduled to begin by the end of 2024, but labor disputes may push the start to December 2025.
- Geely is taking a different approach through a joint venture model. On June 20, it announced a partnership with Renault to co-produce and sell vehicles under both brands in Brazil.
From product rollouts and dealership networks to localized supply chains, Chinese automakers are deepening their footprint in Brazil. But the landscape may shift again in 2026.
That’s when Chinese brands will go head-to-head with entrenched players like Toyota, Renault, and Volkswagen. Success will depend not only on competitive pricing and product appeal but also on navigating Brazil’s political landscape, labor dynamics, and industrial integration.
For China’s automakers, international expansion has entered a more complex phase, and Brazil may be the most telling test so far.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Shi Yi for 36Kr.