BYD’s first factory warehouse in Brazil to be ready in October (2024)

Though the image was initially intended for internal use, it symbolizes the significant strides BYD, China’s largest electric vehicle manufacturer, is making in its global industrial expansion.

Currently, approximately 1,200 workers are transforming the site, previously occupied by a Ford factory until 2021. The site’s transformation is a testament to the shift from its American automotive past.

The Camaçari project is bustling with technicians and engineers on site who are focused not just on construction activities but also on a vibrant exchange of knowledge and expertise. This international collaboration is further highlighted as around 100 Brazilian employees prepare for a trip to China in September, complemented by Chinese colleagues who continue to arrive in Brazil.

According to Mr. Baldy, initially, the cars at the nascent facility will be assembled using parts kits shipped from China. Complete localization, including sourcing components from suppliers for ethanol-powered hybrid vehicles, is slated to begin in 2025.

The equipment for the assembly line is also being sourced from Asia. “It’s already at sea, on its way here,” explains Mr. Baldy, who hails from Goiás and holds a law degree. After an extensive stint in the public sector, he transitioned to BYD, quickly ascending the company’s career ladder.

In Camaçari, BYD is also initiating the construction of residential complexes for its employees, mirroring the housing model from its headquarters in Shenzhen, China. These residences, located just 3.5 kilometers from the factory, will cover an area of 81,000 square meters and accommodate up to 4,200 people.

Despite the significant strides towards establishing manufacturing operations in Brazil, BYD does not yet identify as a local manufacturer. The company perceives itself as a primary target within a resistance movement led by established automakers. These competitors have lobbied against Chinese firms, arguing that they benefit from subsidies back home.

This coalition aims to persuade the Brazilian government to postpone raising import taxes on hybrid and electric vehicles—a domain where Chinese manufacturers excel. Mr. Baldy criticizes this lobbying effort: “It’s questionable to change the rules while the game is in progress,” he asserts.

To date, the government has scheduled a gradual tax increase from January of this year until July 2026, culminating in a 35% rate applicable to all car categories. BYD anticipated these changes by stockpiling sufficient inventory to avoid the initial impact of the tax hike.

Mr. Baldy highlights persistent misconceptions surrounding electric vehicles in Brazil. “One moment, they claim the batteries might catch fire; another, they cite part shortages or argue that electric cars are impractical due to insufficient public charging stations,” he explains.

For Mr. Baldy, such misinformation obstructs the adoption of electric vehicles as tools for decarbonization. He believes these attacks stem from competitors’ inability to offer comparable products.

A key strategy for BYD’s successful penetration into the Brazilian market has been to dispel the notion that electric vehicles are exclusive to the affluent. The company has introduced models priced as low as R$115,000.

BYD has also partnered with corporations and rideshare drivers to highlight the cost benefits of fuel efficiency. This approach has effectively turned ridesharing into an initial “test drive” for many consumers, introducing them to electric vehicles through everyday app-based transportation.

Mr. Baldy reports that BYD has distributed over 50,000 7kWh home chargers, significantly enhancing its customer appeal.

Currently, seven out of every ten fully electric vehicles sold in Brazil are BYD models. Including all brands, BYD now holds tenth place in light vehicle sales as of August, capturing 3% of the market, according to data from Brazil’s National Federation of Automotive Vehicles Distribution (FENABRAVE).

BYD has strategically selected reputable partners for its dealerships to bolster its market presence. Mr. Baldy notes that the company aims to expand its dealership network from the current 130 to 250 by the end of 2025.

To accelerate the rollout of its charging infrastructure, BYD has forged partnerships with entities like Raízen Power.

Rounding out its market entry strategy, BYD is diversifying its product lineup. This week, they are launching the Yuan Pro, a new electric SUV, and in the coming months, they will introduce the Shark pickup truck. By then, BYD’s portfolio will feature approximately a dozen models, spanning electric and plug-in hybrids that can be charged from conventional outlets, as well as traditional combustion engine vehicles.

BYD established its presence in Brazil in 2013, initially focusing on commercial vehicles. It constructed an assembly line for buses and photovoltaic modules in Campinas, in the state of São Paulo, and later set up a lithium iron phosphate battery assembly plant in Manaus. The company also imports fully electric trucks and machinery, such as forklifts, and is engaged in a monorail project in São Paulo (Line 17-Ouro of the metro).

In March, BYD’s management finalized a deal with the government of Bahia, acquiring the land and factory previously owned by Ford for R$287.8 million. The site spans 4.6 million square meters.

That same month, BYD’s global vice-president, Stella Li, met with Governor Jerônimo Rodrigues of Bahia to announce an increase in the company’s investment in Camaçari, from R$3 billion to R$5.5 billion. Earlier, in January, the group had raised its initial employment projection in Bahia from 5,000 to 10,000 jobs.

When asked whether becoming a local producer would lead to joining the National Association of Motor Vehicle Manufacturers (ANFAVEA), Mr. Baldy said, “We haven’t thought about it yet. But we want to gain the consumer’s trust so that they see us as a Brazilian brand.”