Reuters: BYD shifts in the direction of 50% native elements sourcing in Brazil

A 5 February report by Reuters claims that BYD goals to supply or produce 50% of auto parts domestically at its new manufacturing unit in Bahia by the top of 2026 because it pushes to develop into Brazil’s top-selling automaker inside the subsequent decade. The Chinese language electrical automobile (EV) big is investing roughly US$1.1bn into the challenge, with in-house manufacturing situated on a website beforehand utilized by Ford earlier than the US automaker deserted home manufacturing in Brazil.

Since its highly-anticipated October 2025 launch, the Bahia plant has produced round 25,000 EVs and hybrids and at present employs about 5,000 staff. BYD now plans to spice up the location’s manufacturing capability to round 300,000 autos per yr in future phases, primarily double the 150,000 models it expects to supply by end-2026. The plant at present assembles autos utilizing semi-knocked-down kits imported from overseas, which firm officers describe as a brief strategy whereas native provide chains and manufacturing services together with stamping, welding and portray are accomplished.

The Bahia plant’s launch was not with out controversy, drawing scrutiny within the months main up on account of studies of human trafficking and employee exploitation. A state investigation, which started in late 2024, revealed that greater than 220 Chinese language staff have been being held in “slavery-like circumstances” by BYD’s subcontractors. Following a lawsuit filed by Brazilian federal prosecutors in Might 2025, the automaker and its subcontractors have been compelled to pay round US$7.5m in damages. Round half of this sum was earmarked for the affected staff themselves.

For BYD, the transfer in the direction of native sourcing is a response to modifications in native regulation as a lot as it’s a play for regional vertical integration. Brazil ended a brief tariff exemption on 31 January that allowed EVs and hybrids assembled utilizing imported elements from China to enter the nation at sharply diminished prices. The six-month exemption allowed as much as US$463m value of imported kits to enter with out import duties, however drew criticism from the Brazilian lobbying group Nationwide Affiliation of Automotive Automobile Producers (also called Anfavea). The group represents world automakers like Audi, Honda, Renault, Toyota, Volkswagen, Stellantis and GM.

Anfavea argued the tariff exemption rewarded easy meeting quite than full manufacturing and risked shifting manufacturing away from Brazil’s home provide chain. The affiliation circulated research projecting {that a} shift from full manufacturing to large-scale equipment meeting might eradicate as much as 69,000 direct jobs and trigger losses of as much as US$19.6bn throughout the automotive provide chain. Semi-knocked-down kits beforehand confronted an 18% import tax, whereas utterly knocked-down kits attracted a 16% obligation. Each charges have now risen to 35%.

BYD offered 9,755 autos in January 2026, securing fifth place in Brazilian automobile gross sales rankings and surpassing Toyota. The determine represents a 50.5% improve in contrast with January 2025 and raised BYD’s market share to 7.8% from 5.25% the earlier yr. The corporate closed the hole with fourth-placed Hyundai to simply 421 models.

Since coming into Brazil’s passenger automobile market in 2022, BYD has offered greater than 170,000 new vitality autos and now controls greater than 74% of the nation’s EV phase. In an interview with ReutersSenior Vice President Alexandre Baldy mentioned BYD is shifting as shortly as attainable to construct a neighborhood provide chain with the aim of turning into Brazil’s largest carmaker by gross sales volumes by 2030.

Rising native content material would assist meet regulatory necessities, and permit BYD to start exporting from Brazil to neighbouring Mercosur markets as early as this yr. Notably, the automaker additionally acquired mining rights for 2 plots of land within the nation’s ‘lithium valley’ throughout February 2025. The websites are situated roughly 500 miles from the Bahia plant. BYD can be courting native refiner Sigma Lithium a few potential acquisition.