A surge in electric vehicle imports from China drove up Brazilian car imports in the first quarter of 2024, preceding escalating import tariffs designed to safeguard local production. From January to March, imports of passenger cars climbed by 46.4% compared to the same period last year, reaching $1.5 billion, as per data unveiled on Thursday by the Ministry of Development, Industry, Trade, and Services.
Chinese imports alone contributed roughly 40% to the total, experiencing a staggering 450% surge from the first quarter of 2023. Saulo Castro, the ministry’s statistics coordinator, highlighted that these imports primarily consist of electric and hybrid engines.
Import duties on electric vehicles, which had been at zero since 2015, are being reinstated by President Luiz Inacio Lula da Silva this year to foster the growth of the domestic auto sector. As of January, 100% electric vehicles are subject to a 10% tax, set to increase to 18% in July and eventually escalate to 35% by July 2026. Hybrid vehicles, on the other hand, commenced the year with a 15% import tax, set to rise to 25% in July and reach 35% by July 2026.
According to Herlon Brandao, the ministry’s statistics director, it’s customary for importers to accelerate vehicle imports ahead of tax hikes. He mentioned, “With this tariff reaching 35% and industries establishing themselves in Brazil, this growth will eventually taper off in this scenario.”
Marcelo de Godoy, head of the vehicle importers association Abeifa, highlighted the increasing appetite for electric vehicles in Brazil, across both general and premium segments. He noted that the influx of Chinese manufacturers BYD and GWM, which have announced significant investments in local electric car production since last year, is helping to meet this demand.
Data from the Brazilian Electric Vehicle Association (ABVE) indicates a 145% increase in electrified car sales in Brazil in the first quarter compared to the previous year, totaling 36,090 units. BYD led the market with 14,939 units sold, followed by GWM with 5,735 units and Toyota with 5,049 units.
