China's leading electric vehicle manufacturer, BYD, is rapidly expanding its presence in Brazil by exporting tens of thousands of affordable electric and hybrid cars to a market where green vehicles are still emerging. In early 2025, Brazil imported approximately 22,000 Chinese vehicles, with total imports projected to reach 200,000 by the end of the year, accounting for 8% of the country's light-vehicle registrations.
This influx has raised alarms among Brazilian automakers and labor unions, who fear potential job losses and diminished local investments. In response, they are urging the government to expedite a planned tariff increase—from 10% back up to 35% on EVs—to discourage imports and promote domestic production.
BYD had initially planned to commence local production by converting a former Ford plant in Bahia. However, labor violations have delayed this timeline until late 2026. Similarly, another Chinese automaker, GWM, has postponed its local production plans. Critics argue that these companies are not fostering a local supply chain or creating substantial value domestically.
The Brazilian government faces the challenge of balancing its green objectives with industrial protectionism, especially as Chinese imports dominate over 80% of the nation's EV market. This situation is particularly pressing as Brazil prepares to host the COP30 climate summit. While local production plans are progressing slowly, Chinese imports continue to drive Brazil's EV transition.
In related developments, the U.S. Supreme Court recently ruled 7-2 in favor of fuel producers challenging California's vehicle emissions standards under a federal air pollution law. This decision allows industry groups to pursue claims that the Environmental Protection Agency overstepped its authority, potentially impacting the future of stringent emissions regulations in the U.S.
Additionally, a recent survey by Shell indicates that consumer willingness to switch from combustion engine vehicles to electric vehicles is declining, with Europe experiencing a more significant drop than the United States. The survey highlights vehicle cost as the primary barrier to adoption, as EVs remain up to 30% more expensive than traditional cars.
These developments underscore the complex dynamics of the global EV market, where international trade policies, local production capabilities, and consumer preferences are continually evolving.