The Brazilian federal government began implementing a new round of import tax increases on electric and hybrid vehicles starting from July 1. According to the timetable approved by the Executive Management Committee of Foreign Trade (Gecex) in November 2023, the new tax rates will fluctuate between 25% and 30% based on the imported vehicle models.

This measure is part of the Brazilian government's gradual measures against imported vehicles aimed at enhancing the competitiveness of the domestic automotive industry. The Ministry of Development, Industry, Trade, and Services of Brazil has announced the latest tariff standards, which will be applicable until July 2026. By then, all types of electric and hybrid vehicles will be subject to a unified import tax rate of 35%.

It is understood that different vehicle types will see varying adjustments in import tariffs this time: the import tax rate for traditional hybrid vehicles (HEV) will increase from 25% to 30%; plug-in hybrid vehicles (PHEV) will see their import tax rate rise from 20% to 28%; and the import tax rate for battery electric vehicles (BEV) will be raised from 18% to 25%. Starting from July 1, 2026, all electric and hybrid vehicle models will be subject to a 35% import tax.

According to data from the Brazilian Electric Vehicle Association (ABVE), a total of 187,000 electric vehicles were registered for import in Brazil from January to May 2025, marking a 19.3% increase compared to the same period last year. Chinese automakers hold a 55.9% market share in Brazil's electric vehicle market.

On the other hand, Chinese automaker BYD began trial production at its production base in Camaçari, in the metropolitan area of Salvador, Bahia, Brazil, starting from July 1, 2025. The factory is located in the former Ford plant site, with an initial annual production capacity of 150,000 vehicles. The initial models produced include the BYD Song PLUS and BYD Dolphin Mini, with a monthly capacity of 12,500 vehicles. By the end of 2026, the factory is expected to enter the second phase of construction, with annual production capacity projected to expand to 300,000 vehicles.

BYD stated that this project will directly create around 5,000 job positions. Out of the total investment of 5.5 billion reais, 1.4 billion reais have been allocated for the initial construction phase. BYD has sold around 130,000 vehicles in Brazil, with the Dolphin Mini being the top-selling model and one of the best-selling electric vehicles in the first few months of 2025.