Brazil scraps EV tariff break for China carmaker BYD amid pressure from rivals

South China Morning PostEN 1 min read 100% complete by Igor PatrickFebruary 5, 2026 at 04:32 AM

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Brazil has ended a temporary tariff exemption on imported electric and hybrid vehicle parts from China, impacting companies like BYD and Great Wall Motors. The exemption, which expired January 31st, had allowed vehicles assembled in Brazil using imported parts to enter at reduced costs. Originally introduced in August as an incentive for new manufacturers, the policy change reverses this advantage. Now, companies importing semi-knocked down (SKD) and completely knocked down (CKD) kits will face a 35% import tax, a significant increase from the previous 18% and 16% respectively. This decision follows months of tension between the Brazilian government, BYD, and established domestic automakers. The move is expected to raise costs for manufacturers reliant on imported components for assembly in Brazil.