Last week, the federal government decided to return the tax from January 2024 in a staggered manner to “encourage Brazilian industry”. Understand the rates in this report.
In an interview with g1at the company’s headquarters in Campinas (SP), Schneider said that BYD is in favor of resuming the taxthe company is already setting up three factories in Camaçari (BA), but defended a change in the beginning of taxation so that companies in the sector have time to start production in Brazil.
“We felt like a mistake. So, unfortunately, pressure from other sides convinced the government and we are going to work now based on these new numbers, both tax rates and import quotas, and see what we can do. Unfortunately, who what is asked is the final consumer again”, said the executive to g1.
More tiered tax rates
The director of the Chinese giant stated that, if the objective of the measure was to bring more investments, this will not happen in the short or medium term. For Schneider, a greater scaling of tax rates.
“I think a transition over a period of five years with quotas and a rate rising a little less over those five years would be something very interesting,” he argued.
National industry must be stimulated, says Alckmin
To the g1, the Ministry of Development, Industry, Commerce and Services reported that the government’s position was “debated and announced with the entire sector and all representative entities, including importers of electrified vehicles”.
“The proposals and suggestions were collected and analyzed for more than 60 days, generating certainty and predictability for the entire sector. The decision contributes to promoting production, the generation of jobs and income in Brazil”, says the note.
Last week, when announcing the resumption of taxthe vice-president and minister of the portfolio, Geraldo Alckmin (PSB), justified the return by pointing to the need to encourage national industry.
“Brazil is one of the main automobile markets in the world. We must encourage national industry towards all technological routes that promote decarbonization, encouraging investments in production, maintenance and creation of higher-skilled and better-paid jobs.”
Anticipation of the Brazilian factory
According to the government of Bahia, the Chinese multinational’s factories in the state should start producing between the end of 2024 and the beginning of 2025. Questioned by g1 whether taxation can speed up the operation in Camaçari, the executive stated that “any anticipation, if possible, it will be done“.
“Whatever we can accelerate to be able to start manufacturing as soon as possible, the better. But there are things that we cannot accelerate, but we are still within our schedule, within our plan”, stated Schneider.
Impact on vehicle prices
According to the executive, the company is studying scenarios with these rates and quotas and will “try to minimize the impacts on the end consumer”. According to the Brazilian Electric Vehicle Association (ABVE), BYD is currently market leader of electrified vehicles, which includes electric and hybrid vehicles.
How are import taxes
The government informed that the percentages of “progressive resumption” of taxation for automobiles will vary with “electrification levels” and with the production processes of each model.
- 12% in January 2024
- 25% in July 2024
- 30% in July 2025
- 35% in July 2026
Plug-in hybrids (externally recharged):
- 12% in January 2024
- 20% in July 2024
- 28% in July 2025
- 35% in July 2026
- 10% in January 2024
- 18% in July 2024
- 25% in July 2025
- 35% in July 2026
Trams for cargo transport or electric trucks:
- 20% in January 2024
- 35% in July 2024
How electric cars work
The government explained, however, that companies also have until July 2026 to continue importing exempt up to certain value quotas, also established by model.
- For hybrids: quotas of US$130 million until July 2024; US$97 million until July 2025; and US$43 million until July 2026.
- For plug-in hybrids: US$226 million until July 2024, US$169 million until July 2025 and US$75 million until July 2026.
- For electric: on the same dates, respectively US$283 million, US$226 million and US$141 million.
- For electric trucks: $20 million, $13 million and $6 million.
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Tags: Chinese multinational calls return tax imports electric vehicles misstep government stimulate national industry Campinas Region
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