As well as its investment in auto production at Camaçari, BYD is also on the lookout for lithium mining assets in Brazil, which is ramping up extraction of the key metal for EV batteries.
Brazil, which is the world’s sixth-biggest car market, has been relatively slow to embrace electrification. This is attributed in part to its widespread use of lower-carbon ethanol derived from sugarcane. But there are already signs of a shift. Last year sales of EVs almost doubled in Brazil, and in recent months the country overtook Belgium to become the largest single export destination for Chinese EVs.
In an effort to stimulate a homegrown industry, Brasília is imposing rising tariffs on EV and hybrid imports—these will hit 35 percent by mid-2026. Lula, himself a former metal worker, has promulgated a vision of a “green” industrial rejuvenation.
China’s publicity drive in the region includes BYD’s sponsorship of the Copa América football tournament for South American nations. Such marketing campaigns, coupled with aggressive pricing by Chinese car brands, has led to acceptance by Brazilian consumers, says Cassio Pagliarini, chief marketing officer at Bright Consulting, an automotive sector specialist.
In China, the expanding global push by EV makers is seen as part of the broader strategy under Xi of boosting political and economic ties with developing countries via his flagship Belt and Road Initiative.
Over recent years the value of China’s exports to emerging markets has overtaken that with developed economies, a historic change after decades of Chinese growth being more dependent on G7 economies.
“From the perspective of national strategy, there is no doubt that the focus of China’s future foreign economic strategy will shift towards developing countries,” Tu Xinquan, a professor and dean of China Institute for WTO Studies, at the University of International Business and Economics, told local media the day after Biden imposed new tariffs on Chinese EVs.
Yet the expansion of China’s auto industry into these new markets is threatening to eat into the strong market share held by several multinational automakers.
This is particularly worrying for Japanese companies that have built up a strong position in the Southeast Asian market. “China can make a very compelling sales pitch to Southeast Asian countries,” says a senior Japanese government official, highlighting Beijing’s ability to sell not just electric vehicles but also critical raw materials for batteries. “That’s the biggest risk for Japan.”
Another senior executive working with a Japanese carmaker was more direct: “We’re terrified that Chinese cars will flood into Southeast Asian markets.”
Jens Eskelund, president of the European Union Chamber of Commerce in China, says China’s push to promote high-tech manufacturing has put its companies into direct competition with their European counterparts in many sectors in markets across the world, including autos.
European businesses should not be “complacent about the situation,” he adds.
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