BYD Brazil opens the brand’s first assembly plant outside of China in response to local tariffs.
It’s no secret that the huge tax exemptions on electric vehicles in Malaysia are scheduled to come to an end at the start of 2026. Some are hoping for an extension, while other players who are suffering from the EV onslaught are hoping that the government sticks to their original plan. Whatever the case may be, car brands that are entrenched in the success of electric vehicles must commence some form of local assembly and soon. Some companies already do assemble EVs in Malaysia – Volvo Car and Chery come to mind. However, the brand that has sold the highest volume of EVs in Malaysia is still focused on importing for now, but that may soon change given what’s happening in South America.
In Brazil, BYD has just opened its first EV and PHEV production plant in Camaçari just as the country increased tariffs on fully-imported EVs and PHEVs. This will be the first BYD EV plant outside of China, however it only conducts semi-knock down operations (SKD) and this plant was converted from an existing ICE car production facility owned by Ford and purchased for around US$55M early last year.
While the timing of BYD starting operations at the factory sounds brilliant, the company has not yet escaped the tariffs. Apparently the tariffs apply to SKD vehicles as well, but BYD is appealing to the government of Brazil to put these cars in the 10% tariff category. We’ll have to wait and see if the move worked.
BYD is dangling a few carrots to gain the government’s favour, such as investing another US$1B in the country, and opening 3,000 new job vacancies in the country. The company is also working on localization efforts and eventually wants to use local stamping, welding, painting and more in addition to using Brazilian-made Continental tyres.
The BYD Camaçari plant will produce 3 models to start with – the Dolphin Mini/Seagull, the Song Pro (which is only available as a hybrid in Brazil) and the King/Chaser 05 (also a hybrid exclusive). Just like in Malaysia, BYD is the largest seller of EVs in Brazil with 20,000 units sold there in the second quarter of 2025 alone (those it’s unclear if they’ve lumped together hybrids in this number too).
What does this mean for Malaysia? Well it means that BYD is finally signalling to the markets that it’s exporting to that it is prepared to conduct assembly outside of China. However, it also indicates that they’re likely going to put it off until the last minute. Should the government decide to extend the deadline for the excise duty free incentives on EVs, we may be looking at another year of lost tax revenue.
