Chinese electric vehicle manufacturer BYD is set to officially commence operations at its Brazil car plant in July 2025. However, due to heavy rains and a labor investigation, the plant will not reach full production capacity until July 2026, according to Reuters and the Rio Times.
During this period, from July 2025 to July 2026, vehicles will be assembled mainly through complete knock-down (CKD) kits, with a target of producing 50,000 new cars in 2025. The company has employed around 1,000 workers locally and expects to generate up to 20,000 jobs both directly and indirectly over time.
BYD's establishment of manufacturing facilities in Brazil aims to avoid higher import tariffs on vehicles, which the Brazilian government began imposing from July 1, 2025. Before the tariff increase, BYD imported around 22,000 fully built vehicles from January to May 2025 to meet market demand.
The Brazilian market represents BYD's largest overseas presence. In July 2023, BYD announced an investment of more than BRL3 billion (approx. US$565 million) to establish three factories in Camaçari, Bahia. These include a plant for electric and hybrid automobiles with an initial capacity of 150,000 units per year, a factory producing chassis for electric buses and trucks, and a facility for processing lithium and iron phosphate used in battery production.
In December 2023, BYD opened a research and development laboratory in Campinas, São Paulo, focusing on the full production cycle of photovoltaic modules, from quartz processing to product testing. This initiative aims to increase Brazil's self-sufficiency in photovoltaic technology.
Furthermore, BYD expanded into the mining sector in 2023 by acquiring mining rights for lithium-rich plots in Brazil's northeast, near its new factory. This strategic move aligns with BYD's broader battery production plans and resource security.
In early 2025, BYD faced serious labor allegations involving 163 Chinese workers at its Bahia construction site, who were reportedly subjected to "slavery-like" conditions. Brazilian authorities intervened, and BYD responded by terminating the involved contractor and pledging improvements in labor practices. This episode temporarily halted work visas for Chinese employees, further complicating the ramp-up of production at the plant.
BYD's expansion in Brazil illustrates its strategic efforts to capture a growing electric vehicle market while navigating regulatory, operational, and labor challenges. The company's investments in manufacturing, R&D, and resource acquisition signal a comprehensive approach to establishing a strong foothold in Latin America's largest economy.
Article edited by Jack Wu
