Brazil Pushes Back as BYD and Chinese EV Giants Flood Market with Oversupply

Chinese EV manufacturers—led by BYD—are dumping inventory into Brazil's auto market, and tensions are rising.

Why it matters: The South American nation is becoming a battleground for electric vehicle dominance as China's production engine hits overdrive.

The backlash: Brazilian regulators and domestic automakers are scrambling to respond to what they call 'predatory pricing'—while consumers enjoy fire-sale discounts (for now).

Bonus cynicism: Nothing says 'free market' like state-subsidized corporations crushing local competition. Your move, Adam Smith.

Silva says most of the world is closed to the Chinese, except Brazil 

Aroaldo da Silva, a Mercedes-Benz production worker and president of IndustriALL Brasil (a confederation of unions across six industrial sectors), said most major economies around the world had closed their doors to the Chinese, but Brazil did not.

BYD is reportedly among several Chinese brands targeting growth in Brazil.

A Reuters analysis of shipping data and company statements showed that BYD had deployed a growing fleet of cargo ships to accelerate its expansion overseas, with Brazil becoming its top target. The late-May shipment was reportedly the fourth of the Chinese carmaker’s ships to dock in Brazil this year, totaling around 22K vehicles, according to Reuters’ calculations. 

Brazil’s leading auto association claimed that China-built vehicle imports were expected to grow nearly 40% this year, to about 200K. That WOULD account for roughly 8% of total light-vehicle registrations. 

“Countries around the world started closing their doors to the Chinese, but Brazil didn’t…China made use of that.”

–Aroaldo da Silva, President of IndustriALL Brasil

However, Brazilian industry and labor groups said China is taking advantage of Brazil’s temporarily low tariff barriers to ramp up its exports rather than investing to build Brazilian factories and create jobs. They are lobbying Brazil’s government to accelerate a plan to increase Brazil’s tariff on all EV imports by a year to 35% from 10%, rather than gradually phasing in higher levies.

Brazil sets policies aimed at growing sales of EVs and plug-in hybrid cars

🇨🇳 China Floods Brazil with EVs — Sparks Backlash 🇧🇷⚡

— BYD ships 22,000+ EVs to Brazil in 2025, leveraging tariff loopholes and outpacing local automakers
— 🇧🇷 Domestic automakers & unions warn of job losses, urge faster 35% tariff hike on imports
— Brazil's 10% EV import tax…

— AFV GLOBAL (@afvglobal) June 19, 2025

Brazil reportedly offers an enticing EV destination due to its large market, where established players, including Volkswagen, General Motors, and Jeep-maker Stellantis, have been building cars domestically for decades. The Brazilian government has set policies to grow electric and plug-in hybrid car sales, which is BYD’s specialty.

For years, Brazilian officials have taken steps to protect the domestic market from unfettered access by Chinese car companies. However, they have been slower to react and less aggressive than officials in other nations.

Local officials said in May that the Brazilian government supported BYD’s 2023 plan to purchase a former Ford plant in Bahia, viewing it as a way to create manufacturing jobs and spur the country’s green transition. However, an investigation into labor abuses on the construction site pushed back its “fully functional” production timeline to December 2026.

President Lula da Silva’s left-wing Workers Party government is scrambling to protect jobs and the environment to revive Brazil’s industrial economy and restore its green credentials before hosting the COP30 global climate summit this November.

However, the Director of Government Relations at GWM Brazil and President of ABVE, Ricardo Bastos, said that although the country had enough mineral resources, including lithium and other key ingredients to make EV batteries, the infrastructure to produce all the necessary components for electric cars did not exist yet. 

Bastos also mentioned that GWM bought a factory in Brazil in 2021 with a capacity of 50,000 cars a year, and it was due to start producing its Haval H6 SUV there this July. He added that GWM was in talks with around 100 Brazil-based suppliers on setting up contracts.

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