Brazil announced a compromise in a dispute between Chinese EV maker BYD and traditional carmakers on Thursday, granting the company a short-term tariff break while moving forward with hikes that will hit it more aggressively in the long run, reports the South China Morning Post. The decision was reached in a closed-door session of the Chamber of Foreign Trade (Camex) on Wednesday but not released publicly until Thursday. It follows weeks of heavy lobbying on both sides, with carmakers warning of mass lay-offs and BYD accusing rivals of trying to shut out competition.
Under the measure, BYD will be allowed to import up to $463 million worth of semi-assembled electric and hybrid vehicles over a six-month period without paying import taxes. This tariff-free window will apply during the first half of 2026, offering short-term relief as BYD ramps up local production.
Separately, the government decided to bring forward a previously scheduled levy increase. The import tariff for electric and hybrid vehicle kits will now rise to 35% in January 2027, a year and a half earlier than the original July 2028 timeline. Fully assembled vehicles will reach the same 35% rate by July 2026, as previously planned.