BYD criticizes Anfavea over return of import tax – 09/12/2023 – Market

Chinese automaker BYD does not believe that the federal government will announce the end of the import tax exemption for electric cars this month, and criticized the sector association Anfavea, which has been defending for months the return of taxation that was zeroed in 2015 during the mandate. by Dilma Rousseff.

Last week, the president of the vehicle manufacturers association Anfavea, Márcio Leite, told journalists that the end of the import tax exemption for electric vehicles will take place over three years and should be announced soon after a provisional measure that will bring the general objectives of the second phase of the Rota 2030 automotive policy, scheduled for this month.

“It is unreasonable to imagine that the president of an entity of this magnitude (Anfavea) can put words on the agenda of a government that fought so hard to bring COP 30 to Brazil and say that there will be a tax on electric cars that aim precisely to contribute to the protection of the environment”, said BYD’s special advisor in Brazil, Alexandre Baldy, this Tuesday (12) in an interview with Reuters. Baldy referred to the global climate summit that will be held in Belém in November 2025.

When contacted this Tuesday (12), Anfavea did not respond.

“Our dialogue is with the government and we have not had any discussion with the government like this (return of taxation)”, stated the executive, former Minister of Cities in Michel Temer’s government.

According to Baldy, BYD vice-president Stella Li and the company’s founder and president, Wang Chuanfu, will come to Brazil in the first half of October. On that occasion, executives are expected to announce the start of construction work at the group’s vehicle factory in Bahia.

Sales of electrified cars (hybrids and fully electric) have jumped in recent months in Brazil, with the total accumulated from January to the end of August almost equaling the entire volume of 49,200 units in 2022, according to the Brazilian Electric Vehicle Association (Abve).

In August, BYD had the second most sold electrified car in Brazil, behind only a model from Toyota, the first automaker to launch a flex hybrid vehicle in the country. The Chinese company registered sales of 761 units of the Song Plus GS hybrid utility vehicle against 851 of the Japanese automaker’s Corolla Cross hybrid SUV, according to data from Abve.

In Abve’s general ranking, the manufacturers that sold the most electrified vehicles in August were Toyota (1,976 units), Caoa Chery (1,711), BYD (1,454), GWM (1,451) and Volvo (647).

In addition to BYD, the Chinese company GWM is selling electrified imports in Brazil while its factory in the interior of São Paulo is not ready. The company has three models on Abve’s list of the ten best sellers in August. The company did not comment on the matter last week when contacted by Reuters.

Baldy mentioned that Anfavea’s defense for the return of the 35% import tax bears similarities to the mid-2010s, when the national automotive sector managed to convince the government to approve the Inovar-Auto program to protect the national market against a boom of imports of Chinese vehicles. The program was later questioned at the World Trade Organization (WTO).

“The appeal of those who want to protect their markets, without a doubt, is similar. Now, the companies are different…Today we are talking about the largest company in the world in its sector. It is not an adventurer and it is not just any group”, said BYD’s special advisor in Brazil.

Currently, BYD competes for global leadership in electric vehicle sales with North American Tesla and promises investments of at least 3 billion reais in Brazil.

“We have no concerns about an increase in import taxes,” said Baldy. “We have not had any mention from the federal government about raising any taxes,” he stated, citing that the discussion causes economic instability by raising concern among vehicle dealers.

Baldy, however, stated that a debate about a transition to the end of the import tax exemption “is healthy.”

“BYD’s desire is not to import cars indefinitely, it is to bring very relevant investment to Brazil so that we can produce our models here”, said the representative of the Chinese group in the country.

He stated that the company plans to start production between the end of 2024 and the beginning of 2025 and that there will be two initial models, the Song Plus hybrid and the Dolphin electric hatch.

“Soon afterwards” the company will also produce the Seagull electric subcompact in Brazil, said Baldy, adding that the company is “signing a cooperation agreement with ethanol industries” in Brazil for the production of flex hybrid models.

For Baldy, despite Anfavea’s defense of the import tax and doubts about the extension of tax incentives for vehicle production in the Northeast, the environment is favorable for the company due to the decarbonization agenda defended by the government of Luiz Inácio Lula da Silva.

Rebutting a comment from the president of Anfavea, who last week cited among the entity’s concerns companies that “invest to assemble 100 thousand vehicles, but will bring (import) 500 thousand”, Baldy recalled that no automaker in Brazil currently sells 500 thousand vehicles per year in the country.

“There is no basis for a tax increase in an environment in which Brazil wants to be a country with a global environmental protection agenda and which will have its main global role at COP 30, in 2025,” said Baldy.

When contacted, representatives from the Ministry of Development, Industry, Commerce and Services were unable to comment on the matter immediately.