China’s BYD spreads wings to South America, launches electric car in Brazil

“I think now is the political and environmental moment for us to invest in developing these new technologies in Brazil,” BYD Americas President Li Stella said in an interview on Wednesday during the unveiling of the two SUV models.

The cars are the hybrid Song and the pure electric Yuan. They will be imported until a new factory in the northeastern state of Bahia starts operating.

“But it will be a very challenging process, and we need a government that is open to the development of technology here,” Lee added.

President-elect Luiz Inácio Lula da Silva, who takes office on Jan. 1, has promised to overhaul Brazil’s environmental policy, calling for a “green economy”-focused industry in his plan to win elections in October and the need to modernize the automotive industry with hybrids.

In October, BYD signed a letter of intent with the Bahia state government with an eye toward establishing car production in industrial areas left when Ford Motor Co. closed its factories outside the capital Salvador.

BYD will invest 3 billion reais ($550 million) in three plants to produce electric bus and truck chassis, as well as electric cars and hybrids, the Bahia state government said, and will also process Brazilian lithium for car batteries for export to China.

The Bahia state government said at the time that two of the plants would start production in 2024 and the third in 2025.

Lee declined to give details, saying a decision on the project should be made by the end of the year.

Asked about the risks posed by Brazil’s history of political, economic and legal turmoil, she said BYD was “patient with Brazil”.

“We have been in Brazil for almost 10 years, during which time we have experienced a lot of political changes, as well as exchange rate fluctuations, inflation. But I think in the long run, Brazil has its own advantages,” Li said.

She cited the size of the Brazilian market, the availability of battery raw materials such as lithium, and the new government’s seeming willingness to encourage the industry.

“We are at a good time to start expanding the technology here. Brazil will in time develop its own electric and hybrid vehicle industry,” she said.

BYD expects that 10 percent of all car sales in Brazil will be electric and hybrid models by 2025, up from 2.4 percent today, and that EV market share could jump to 30 percent by 2030.

Li pointed to the tax burden as one of the main factors behind the high price of electric and hybrid vehicles in Brazil compared to other markets.

“If you tax high, you kill the baby before it grows,” she said.

First published date: Nov 18, 2022 at 09:13 AM CST