BYD, the Chinese electric vehicle giant, is expected to start local assembly of EVs this month in a newly built plant in Brazil. This shift comes as a result of increasing import taxes.
The new BYD facility in Bahia, on the former Ford site will allow BYD to reduce its imports and start a localization of the supply chain for the company’s top overseas market.
Automaker to manufacture locally 50,000 vehicles by 2025, using knockdown kits (CKD), all which are shipped from overseas.
According to estimates from Reuters, BYD finalised its EV imports for this year following the increase in duties that came into effect on July 1. Around 22,000 units will be shipped out of China during the first five months in 2025.
Brazil’s auto industry has criticized BYD for putting China ahead of domestic production.
Delay in ramp up and regulatory obstacles
This company has not yet begun operations as it is awaiting the final approvals from regulatory authorities.
BYD originally planned to achieve full production at Camacari by July 2026.
The company is currently focusing on building vehicles using imported kits in the coming year.
Inclement weather, and disruptions in the labour force have slowed down progress at the plant. A labour official stated in May that the plant wouldn’t be “fully operational” until 2026. This was a disappointment.
The complex will generate 20,000 jobs in direct and indirect employment once it is operational. This makes BYD a significant employer and key part of its long-term Latin American Strategy.
Labour disputes cloud expansion
BYD, despite its lofty goals, is constantly investigated for the conditions of labour on construction sites.
Brazilian labor authorities accused Chinese workers at the firm of “slavery” in December 2024.
Brazilian prosecutors escalated the situation in May 2025 by filing a suit accusing BYD Human Trafficking, and holding it accountable for its harsh practices.
The plant development is still a legal grey area despite attempts to reach a settlement through the courts.
BYD responded to the lack of success in settlement talks by saying that it is committed to Brazilian labor laws and human right, but did not provide any specific reasons.
The importance of strategic planning in the face of geopolitical, economic and social pressures
BYD’s rapid expansion in Brazil is similar to the recent efforts of local Chinese automakers in other countries who have been exploring international markets following recent restrictions on their trade.
Brazil is a major consumer market that sees EVs on the rise. It’s a market of importance for the company because it has a high demand.
BYD contests the local assembly as a way to combat tariffs, and be competitive with domestic and international companies.
Brazilian regulators, as well as consumers who are concerned with employment and economic sovereignty, will likely welcome the move to manufacture domestically instead of importing.
The labour issue, however, is a risk to its reputation that may come back and bite them in the eye of the public as well as the new regulators.
In order to achieve this goal, the firm is trying to set itself up in South America. Whether the suit becomes a roadblock or how it works to meet local standards will be a key indicator.
BYD is entering a crucial chapter in its expansion as it prepares to start assembly operations on the Brazilian market.
This project will be successful if the balance between economic opportunities, industrial development in local communities, and ethics is maintained.
During the coming year, the company will have to prove its ability to adjust to local conditions and implement the global EV strategies.
As new information becomes available, this post BYD begins EV assembly on the Brazilian mainland as labor and tariffs increase may change.
