Brazil’s Tariff Hike on Electric Vehicles Aims to Boost Local Factories and Targets China

Brazil’s government has decided to raise tariffs on imported electric and hybrid cars. Officials say this move will help local car factories and protect jobs.

Starting July 2025, the tariff on fully electric cars will go up from 18% to 25%. The tariff on regular hybrids will rise from 25% to 30%, and plug-in hybrids from 20% to 28%.

By July 2026, all these vehicles will face a 35% import tariff, which is the highest allowed under South American trade rules. For several years, Brazil let electric cars enter the country without import tariffs.

The goal was to encourage people to buy cleaner cars and help modernize the car market. This policy led to a boom in electric car sales. In 2024, Brazilians registered about 177,000 electric vehicles, compared to only 41,000 in 2019.

In May 2025, sales of battery electric cars reached a record high of nearly 7,000 in one month. Most of these cars came from other countries, especially China.

In the first half of 2024, Brazil imported over 62,000 electric cars from China, making up more than 90% of total electric car imports. Chinese brands like BYD sold many cars in Brazil by taking advantage of the low tariffs.

Brazil Boosts EV Tariffs to Attract Factories and Protect Jobs

Local carmakers and workers started to worry that Brazil was becoming too dependent on foreign cars and losing jobs in its own factories. The government’s new plan is simple: make it more expensive to import electric cars so that companies will build factories in Brazil instead.

This plan is already working. Chinese companies like BYD and Great Wall Motor have announced new factories in Brazil. BYD’s new plant in Bahia is set to open in 2025, with the ability to make 150,000 cars a year and plans to double that later.

These projects could create up to 20,000 jobs and help local suppliers. While the higher tariffs will make imported electric cars more expensive, the government hopes that local production will eventually lower prices and create more jobs.

Brazil’s new rules show how countries try to balance new technology with protecting their own industries. Brazil’s large market and new policies are making it an important place for the future of electric cars.