Brazilian Market Flooded With Chinese EVs Before Import Tax Hike

Imports of new passenger cars, especially those originating from China, have temporarily surged in Brazil. This increase is largely attributed to the growing demand for electric vehicles and the imminent implementation of import taxes on them.During the first quarter of 2024, passenger car imports in the country surged by 46.4%, reaching a combined value of $1.5 billion.

Approximately 40% of these cars originated from China, marking a massive 450% increase from Q1 2023. The majority of vehicles imported from China are battery-electric vehicles and hybrids.Read: 2025 Chevrolet Spin Debuts In Brazil With Extensive Visual And Tech UpgradesA series of new import taxes have also begun to be enforced in Brazil.

While electric vehicles had previously been exempt from import taxes, President Luiz Inacio Lula da Silva has implemented a 10% tax on them since January. This figure will rise to 18% in July and peak at 35% in July 2026.Starting from the beginning of this year, hybrid vehicles were also subjected to a 15% import tax in January.

This rate is set to increase to 25% in July and further to 35% by July 2026.Speaking with Reuters, the statistics director of the Ministry of Development, Industry, Trade, and Services, Herlin Brandao, said the government expects imports to slow when taxes are increased further.“This tariff will reach 35% and industries are also setting up in Brazil, so this growth will eventually slow down given this scenario.”BYD has already established itself as the best-selling brand of BEVs in the country. In the first quarter, it sold 14,939 vehicles in Brazil, comfortably placing it ahead of Great Wall Motors with 5,735 units delivered, and Toyota that shifted 5,049 electrified vehicles over the same period.

A total of 36,090 electrified cars were sold in Brazil in Q1, a 145% rise from the January-March period of 2023.BYD is currently assembling a new manufacturing complex in Brazil. This site should be operational by the end of this year or in early 2025 and will have an annual production capacity of 150,000 units per year and be responsible for building vehicles including the Dolphin, Song Plus SUV, and Yuan Plus.