Shares in Chinese car maker BYD (BYDDY) reversed today despite revealing that it had the checkered flag to start producing electric vehicles in Brazil.
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Brazilian Goals
BYD said it was ready to begin manufacturing at its new factory in Bahia state as early as this month, cutting its reliance on imports at a time of huge tariff uncertainty in the BRICS nations.
Although final regulatory approvals are still pending, Alexandre Baldy, senior vice president for BYD in Brazil, said the goal is to assemble 50,000 cars this year at the plant from imported kits.
“We should inaugurate in the coming days,” Baldy said. “We’ve already completed this year’s imports, taking advantage of the period before the import tax increase that took effect on July 1.”
Baldy said it would begin full production in July 2026, after assembling vehicles from “complete knock down” (CKD) kits for the next 12 months.
Once fully operational, he said, the complex is likely to generate up to 20,000 direct and indirect jobs.
BYD had sent a surge of finished cars into Brazil this year to take advantage of temporarily lower tariffs, shipping some 22,000 from China in the first five months, according to Reuters.
Factory Struggles
Brazilian car manufacturers were left spluttering, concerned about what it means for domestic sales and jobs.
The factory itself has come under fire in recent months.
Earlier this year the Public Labor Prosecutor’s Office (MPT) in the state of Bahia said it was suing BYD and two of its contractors, accusing them of human trafficking and creating conditions “analogous to slavery” at a factory construction site.
The MPT said it had rescued 220 Chinese workers after receiving an anonymous complaint. It is now seeking $45.5 million in damages from the three firms. BYD has said that it respects human dignity in all of its operations.
Despite the furor, BYD’s goal of seeking to dominate overseas markets is likely to continue. It has a target to sell half of its vehicles outside the Chinese market by 2030 in response to an increasingly competitive EV market both at home and abroad.
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