In a notable development in international trade, Brazilian car imports experienced a significant uptick in the first quarter of 2024, primarily fueled by a surge in electric vehicle imports from China. This surge comes as Brazil braces for rising import tariffs aimed at safeguarding domestic production.
Data released by the Ministry of Development, Industry, Trade, and Services revealed a remarkable 46.4% increase in passenger car imports compared to the same period last year, totaling $1.5 billion. Chinese electric vehicles accounted for approximately 40% of this total, with imports skyrocketing by an astonishing 450% from the first quarter of 2023.
Saulo Castro, the ministry's statistics coordinator, highlighted that the surge in vehicle imports, particularly from China, is predominantly driven by electric and hybrid engines.
Import taxes for electric vehicles in Brazil had been at zero since 2015. However, President Luiz Inacio Lula da Silva has initiated steps to reinstate tariffs this year to foster the development of the domestic auto industry. Importation of 100% electric vehicles is now subject to a 10% tax, set to increase to 18% in July and eventually reach 35% by July 2026. Similarly, hybrid vehicles face escalating tariffs, starting from 15% and reaching 35% by July 2026.
Herlon Brandao, the ministry's statistics director, noted that the surge in imports ahead of the tariff increase is a common phenomenon. However, he anticipates a slowdown in growth as industries establish themselves in Brazil in response to the changing tariff landscape.
Marcelo de Godoy, head of the vehicle importers association Abeifa, emphasized the growing demand for electric vehicles in Brazil, particularly in both general and premium segments. He underscored the role of Chinese automakers like BYD and GWM in meeting this demand, highlighting their 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 the market with 14,939 units, followed by GWM with 5,735 units, and Toyota with 5,049 units.
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