BYD to manufacture EVs, chassis and battery materials in Brazil from 2024

BYD is planning to build three production facilities on a former Ford industrial site in Brazil: one for the production of electric and hybrid cars, one for chassis for electric buses and trucks, and a third that will process lithium and iron phosphate for the international market.

To convert the site in the Camaçari industrial park in the Brazilian state of Bahia, BYD is ready to spend up to three billion Brazilian reals, the equivalent of around 570 million euros. According to Reuters, the announcement comes after the government signalled its willingness to grant BYD subsidies for the construction of a new electric car centre. Ford closed the site in 2021.

BYD’s move in Brazil does not come as a surprise. As early as November 2022, the manufacturer said it was preparing the production of electric vehicles and the processing of raw battery materials in the South American state. The Chinese manufacturer also signed a memorandum of understanding with the government of the state of Bahia at the time.

According to the latter, the plants are expected to start operations in the second half of 2024. The passenger car plant will be designed for an annual capacity of 150,000 electric and hybrid cars, which can be doubled to 300,000 units if needed. And in total, BYD plans to create more than 5,000 direct and indirect jobs at the new site in Camaçari.

While these are all new details in the government declaration, there were prior reports that the lithium and iron phosphate would be extracted from Brazilian sources, but then transferred to China. In other words, BYD wants to keep the production of the cells and batteries in its home country. Whether the company is really pursuing this strategy is not clear from the current government statement, nor from the agency reports. But it would be consistent with BYD’s current mode of operation. The carmaker is constructing all of its new battery cell factories in China, while the only international reports so far have mentioned a planned battery plant in Europe.

The plants in Bahia are not BYD’s first production facilities in Brazil. The company already manufactures electric bus chassis in Campinas in the Brazilian state of São Paulo and operates a factory for battery modules for lithium iron phosphate batteries in Manaus, the capital of the Brazilian state of Amazonas. BYD is also reportedly planning to build a battery materials factory in Chile.

Other carmakers are also flirting with production in Brazil, such as Chinese carmaker Great Wall Motor (GWM), which plans to open an EV factory in the Brazilian state of São Paulo next year. VW, too, announced this week an investment of one billion euros by 2026 for a product offensive in South America – especially in Brazil.

reuters.com, bnnbloomberg.ca, twitter.com, bahia.ba.gov.br (in Portuguese)