BYD’s New Brazil Factory To Boost Electric Vehicle Production By July 2025

Chinese electric vehicle giant BYD is set to launch its first assembly plant in Brazil this month, a strategic move to localize production and counter rising import tariffs in its largest foreign market. According to Reuters, the Bahia facility will assemble 50,000 electric vehicles in 2025, marking a significant step for BYD’s global expansion and Brazil’s growing EV industry.

Launching Local Assembly

BYD’s new factory in Camacari, Bahia, on the site of a former Ford plant acquired in 2023, will begin assembling electric vehicles from imported “complete knock down” (CKD) kits.

Alexandre Baldy, BYD’s senior vice president in Brazil, confirmed, “We should inaugurate in the coming days,” pending final regulatory approvals.

The plant aims to produce 50,000 vehicles this year, reducing reliance on imported cars, which surged to 22,000 units in the first five months of 2025 to leverage lower tariffs before a July 1 tax hike.

The assembly process involves CKD kits, where pre-manufactured components are shipped from China and assembled locally. This approach allows BYD to scale production quickly while navigating Brazil’s complex tax structure. Baldy noted ongoing negotiations for a lower tax rate on these vehicles, which could enhance affordability for Brazilian consumers.

Overcoming Challenges

The Bahia plant has faced hurdles, including heavy rains and a labor lawsuit. In May, Brazilian prosecutors accused BYD of human trafficking and “slavery-like conditions” involving Chinese contractors, following failed settlement talks.

Despite these allegations, Baldy emphasized BYD’s commitment to compliance, stating, “BYD has always sought to respect Brazilian law and human dignity in all operations.” He assured that the lawsuit would not delay the factory’s timeline, with full production slated for July 2026.

The labor probe highlighted concerns about working conditions, but BYD’s response underscores its intent to resolve issues and maintain operational momentum. The facility is expected to create up to 20,000 direct and indirect jobs once fully operational, boosting the local economy in Camacari.

Implications for Brazil’s EV Market

BYD’s investment signals confidence in Brazil’s EV market, where demand is growing amid rising fuel costs and environmental awareness. Local assembly could lower vehicle prices, making models like the BYD Dolphin and Song Plus more accessible. The plant’s output of 50,000 vehicles in 2025 translates to roughly 4,167 units monthly, a significant volume for a market where EV adoption is accelerating but still trails global leaders.

The shift to local production also aligns with Brazil’s push for industrial growth. By reducing imports, BYD mitigates tariff costs—now higher after the July 1 increase—and strengthens its competitive edge against rivals like Tesla and local manufacturers. However, industry critics argue that BYD’s earlier import surge strained Brazil’s auto sector, which employs thousands in traditional manufacturing.

Technical and Economic Outlook

The Bahia facility will initially rely on CKD kits, with full production in 2026 enabling end-to-end manufacturing. This transition could enhance supply chain efficiency, reducing delivery times for Brazilian buyers. Economically, the plant’s job creation—up to 20,000 roles—offers a lifeline to Camacari, hit hard by Ford’s 2021 exit. At an exchange rate of approximately 5.5 BRL to 1 USD (as of July 2025), the project’s investment, though undisclosed, is likely substantial, given the facility’s scale.

BYD’s Brazil venture positions it as a key player in Latin America’s EV landscape. By addressing regulatory, labor, and logistical challenges, the company aims to deliver affordable, locally assembled electric vehicles, driving both economic growth and sustainable mobility.

Photos courtesy of BYD