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With the increasing arrival of Chinese electric cars in Brazil, Anfavea has raised concerns: more than 80 units are sitting in stock, unable to find buyers. The Brazilian market, which is still in its infancy in adopting electrified cars, could become the “graveyard” of electric cars from China.
The electric car market in Brazil is facing an unexpected challenge, which has generated great concern among industry experts. Anfavea (National Association of Automobile Manufacturers) recently revealed that around 80.000 Chinese electric and hybrid vehicles are currently stranded in the country, awaiting absorption by the market. The news raises questions about the viability and future of Chinese electrified cars in Brazil and points to the country as a possible new “graveyard” for Chinese electric cars, a situation that could have significant impacts on the national automotive market.
Chinese electric cars stranded in Brazil: how did this happen?
According to the president of Anfavea, Marcio Leite, the strategy of massive import of Chinese electric and hybrid cars was an attempt by automakers to anticipate the new import tariffs that will come into effect in the coming years.
With the government's decision to resume charging import taxes on electrified vehicles from January 2024, many automakers saw the need to bring a large number of electric cars to Brazil before the increase in tariffs.
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However, this strategy ended up creating a large stock of stranded electric cars in Brazil. According to Anfavea, the 80 Chinese cars that are already in the country represent a volume that the Brazilian market just can't absorb it at the moment.
“The market does not absorb the number of vehicles with these new technologies”,stated Márcio Leite, highlighting the difficulty of keeping these vehicles in stock, especially in a year-end scenario, which normally requires a significant reduction in inventory.
Impacts of the stock of Chinese cars stranded in Brazil, similar to the 100 in the Chinese car graveyard
The excess of electric and hybrid cars in Brazil could have serious consequences for the domestic market, both for new and used vehicles. This imbalance could even delay the arrival of new Chinese electrified car models in the country.
Anfavea also warns that this situation could have an impact on prices, since the pressure to sell accumulated stock could result in discounts, which directly affects the margins of automakers and dealerships.
Furthermore, Anfavea is concerned about the possible slowdown in the pace of imports of electrified vehicles, since the entry of new models could be limited by the excess stock already in place.
To contain the progress of this situation, the association has advocated a faster increase in the import tax on electric vehicles, so that it reaches 35% sooner than expected. This move could help to stop the entry of more vehicles, while the market adjusts to the current stock.
What does the government say about the scenario of stranded electric cars in Brazil?
The federal government, in turn, has already begun implementing an import tax plan that aims to control the flow of imported electric and hybrid vehicles. For 100% electric cars, the import tax collection started at 10% and is expected to reach 35% by July 2026. Hybrid vehicles will have different rates, according to their specificities.
This measure is part of a strategy to encourage local production of electrified vehicles. Chinese automakers such as BYD and GWM (Great Wall Motors) have already announced that they will begin production operations in Brazil, which should help balance the market and reduce dependence on imports. However, until this happens, Brazil may continue to accumulate stranded electric cars, which will only make the situation worse.
Brazil as a 'cemetery' for electric cars: a possible future?
With the large number of electric and hybrid cars stranded in Brazil, the country is at risk of becoming the new “graveyard” for Chinese electric cars. Although this term is alarming, it reflects a reality in which electrified vehicles, which should be a sustainable and innovative solution, end up being underutilized and not absorbed by the consumer market.
Anfavea president Márcio Leite believes that the dominance of electric cars in Brazil will not be as significant as in other regions, such as Europe. He explains that, although Brazil is advancing in infrastructure to support the expansion of electric vehicles, the country still has a strong dependence on biofuels, an alternative considered more sustainable in the Brazilian context.
“Brazil has to look at what it knows how to do well,” said Leite, highlighting the importance of biofuels in the decarbonization of the national fleet.
Tax reform and the future of the automotive industry in Brazil
In addition to concerns about the stock of stranded electric cars in Brazil, Anfavea is keeping an eye on the changes brought about by tax reform.
The government's proposal to reform the tax system promises to benefit the automotive industry by reducing the tax residue on exports. According to Márcio Leite, this reform will make exports of vehicles produced in Brazil more competitive, making them more attractive to the international market.
However, the association is still fighting to exclude cars from the selective tax, a new tax that could drive Brazilian consumers away from newer, more technologically advanced vehicles. For Anfavea, this measure goes against efforts to renew the fleet and decarbonize the sector, both considered fundamental to the future of the automotive industry in the country.
Electric cars stranded in Brazil and the challenges for the future
The current scenario of the automotive sector in Brazil reveals a complex set of challenges, especially in relation to the large stock of Chinese electrified cars stranded in the country. With around 80.000 vehicles awaiting buyers, Brazil risks becoming a veritable “cemetery” of electric cars, an unexpected fate for a technology that should represent the future of sustainable mobility.
While the government and Anfavea work on solutions to control the flow of imports and encourage local production, the Brazilian automotive market continues to seek a balance that allows the absorption of these vehicles without compromising the financial health of automakers and dealerships.
The future of electric cars in Brazil will depend not only on infrastructure and public policies, but also on the market's ability to adapt to this new technological reality.
