On one side of the complex board of Brazil’s automotive industry stands BYD, China’s largest electric vehicle manufacturer, making rapid inroads into the local market.
On the other is ANFAVEA, which defends the interests of companies with production facilities in Brazil.
While the Asian giant calls on the Brazilian government to reduce taxes, in the wake of the global repercussions from tariffs imposed by the United States and Europe, the local association demands protections to avoid deindustrialisation.
This conflict highlights tensions between trade openness, technological innovation and national production safeguarding—challenges that also affect the broader automotive sector.
In this analysis by Mobility Portal Latinoamérica, we outline the key points of the dispute and the current scenario in which all stakeholders must make critical decisions.
BYD’s Rise in the Brazilian Market
With an aggressive expansion strategy, BYD has established itself as one of the key players in Brazil’s electric vehicle sector.
In 2024, its Dolphin model was the country’s top-selling clean energy car, with 15,202 units sold, according to data from the Brazilian Electric Vehicle Association (ABVE).
This success was complemented by the Song Pro and Song Plus, further cementing the company’s position in the rankings.
Simultaneously, BYD is building an industrial complex in Camaçari (Bahia), on the grounds formerly occupied by a Ford plant.
With an investment of US$1 billion, the company plans to produce 150,000 vehicles per year, with a goal to double that capacity by 2028.
It recently announced that it would begin local production in June (initially assembling imported kits) of its popular Dolphin model.
It is worth noting that after Vice President and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin, announced the potential early implementation of a higher import tax (IPI) on electric vehicles—from July 2025, the current rate would rise to 25%—BYD pre-emptively shipped over 7,000 vehicles into the country.
Although it has reaffirmed its commitment to domestic production, BYD submitted three formal requests in April 2025 to the Foreign Trade Chamber (Camex):
• Reduction of tariffs on CKD and SKD assembly kits
• Tax incentives for local EV assembly
• Facilitated imports of strategic components such as batteries
These requests aim to ensure short-term competitiveness as the company completes its factory installation.
ANFAVEA Reacts: A Call to Close Ranks
Igor Calvet, ANFAVEA’s President, voiced strong concerns.
The response was swift. In a recent interview with Estadão, Calvet—former official at the Ministry of Development—described BYD’s request as “an affront to the Brazilian state and to workers”.
He warned that “importing near-complete vehicles just to tighten bolts does not generate employment.”
ANFAVEA is demanding the following:
• Immediate restoration of the full 35% tariff on imported EVs (currently at 18%)
• No exceptions for manufacturers whose local operations have not yet begun
• An anti-dumping investigation into the oversupply of Chinese vehicles
According to Calvet, 112,000 cars were imported in the first quarter of 2025 alone—22,000 more than the previous year. The association forecasts over 200,000 imported units by year-end, many of them Chinese-made.
The Brazilian Market Grows Amid Global Influences
This dispute unfolds as the Brazilian market continues to grow, though with signs of a slowdown. According to Fenabrave, April sales totalled 208,700 units, a 5.5% decrease compared to April 2024, but the year-to-date figure still shows a 3.4% increase.
Brazil currently applies an import tariff that could reach a maximum of 35% on electric vehicles by next year. In comparison, the US imposes 135% to 150%, Canada 106%, India 75%, and the European Union up to 48% on Chinese vehicles.
ANFAVEA’s concern is that, with such a low tariff, Brazil may become a target for trade diversion from China or Mexico. The risk of “commercial dumping” has already prompted the association to hire a law firm to explore a formal legal challenge.
The government is caught at a crossroads. On the one hand, it seeks to attract investments like BYD’s, which promise jobs and innovation. On the other hand, it must respond to pressure from an established industry concerned about losing competitiveness.
