Apr 5 2024: In the first quarter of 2024, Brazil experienced a significant increase in car imports, particularly electric vehicles (EVs), from China. This surge comes just before the implementation of higher import tariffs aimed at safeguarding local car production.
Data released by the Ministry of Development, Industry, Trade, and Services revealed that passenger car imports surged by 46.4% to $1.5 billion compared to the same period last year. Chinese vehicles accounted for about 40% of these imports, marking a 450% increase from the first quarter of 2023.
Saulo Castro, the ministry’s statistics coordinator, noted that the spike in vehicle imports, particularly from China, is primarily driven by electric and hybrid engines.
Since 2015, import taxes for electric vehicles had been reduced to zero. However, President Luiz Inacio Lula da Silva is reintroducing these tariffs this year to promote the growth of Brazil’s domestic auto industry.
Starting in January, 100% electric vehicles faced a 10% import tax, which will gradually rise to 18% in July and eventually reach 35% by July 2026. Hybrid vehicles began the year with a 15% import tax, increasing to 25% in July and reaching 35% by July 2026.
Herlon Brandao, the ministry’s statistics director, explained that it’s common for importers to increase vehicle imports before a tax hike. However, he expects this growth to slow down as the tariffs reach 35%, especially with local industries expanding in Brazil.
Marcelo de Godoy, head of the vehicle importers association Abeifa, highlighted the growing demand for EVs in Brazil, including both general and premium segments. He mentioned that Chinese automakers like BYD and GWM have made investments in local electric car production.
According to the Brazilian Electric Vehicle Association (ABVE), sales of electrified cars in Brazil surged by 145% in the first quarter compared to the previous year, totaling 36,090 units. BYD led this growth with 14,939 units sold, followed by GWM with 5,735 units and Toyota with 5,049 units.