Tax Cut For BYD Kits Causes Crisis Between Government And Domestic Automakers

An Important Government Decision Could Change The Course Of The Automotive Industry In Brazil. A Request Made By The Chinese Manufacturer BYD Will Be Analyzed By A Committee Linked To 11 Ministries, Amid Criticism From The National Industry And Tensions With The United States.

The Executive Committee of Foreign Trade of the Chamber of Commerce (Gecex-Camex) has scheduled an extraordinary meeting for Wednesday, July 30, 2025. The meeting occurs two days before the 50% tariffs imposed by the United States on Brazilian products take effect.

Despite the proximity of the dates, sources interviewed by the O Estado de São Paulo denied any connection between the two events.

The most important thing is that the agenda for the meeting involves measures that could favor the Chinese manufacturer BYD.

The company requested, in February, a reduction in the import tax for SKD and CKD kits used in vehicle assembly.

In the case of electric vehicles, the request is to reduce the rate from 18% to 5%. For hybrids, the proposal is to lower it from 20% to 10%.

Criticism From The National Industry

BYD’s operations in Camaçari (BA) began in June.

The manufacturer’s strategy is to assemble cars that arrive almost ready from China. Therefore, reducing CKD kit taxes would be essential for the company.

Lula is expected to visit the facility in August during the official inauguration. In recent statements, the president praised BYD, stating that the company is promoting “a revolution in the Brazilian automotive industry.”

On the other hand, the proposal faces resistance from the national industry.

Anfavea has sent letters to Geraldo Alckmin and Rui Costa criticizing the possible tax reduction.

The entity believes that this could harm local production and negatively affect Brazilian manufacturers.

The Gecex-Camex decision could have direct effects on the national automotive sector and the relationship with the Chinese industry.

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