Brazil’s BYD Factory Launch Faces Delays as Equipment Awaits Tariff Exemption Decision

According to Alexandre Baldy, senior vice president for BYD in Brazil, BYD’s machinery for its hybrid and electric vehicle plant in Camaçari, Bahia, has been stuck at the Port of Salvador for nearly two months. This could potentially delay the start of operations expected in the first half of 2025.

Baldy told Reuters that the company is waiting on a tariff exception approval, as the imported equipment, which has no equivalent in Brazil, qualifies under a fiscal incentive regime. “We submitted a request to the Foreign Trade Chamber in May to enter the Duty Suspension Program,” he said. In July, the government requested further details on the imported components, which BYD provided. Since then, BYD has been awaiting a decision from Gecex, the executive committee of the Foreign Trade Chamber, on the tariff exemption.

BYD stated that the equipment, which began arriving on August 28, is crucial for moving bodywork along the vehicle assembly line.

Asked if the delay might push back the plant’s start date, Baldy responded, “Certainly…I don’t have an exact timeline, but we’re now looking at at least a 60-day delay.” The company aims to begin car assembly in December, with total production in the first half of 2025.

Gecex indicated that, from the Ministry of Development, Industry, Trade, and Services’ (MDIC) perspective, there are no obstacles to clearing the cargo. The company could retrieve it “if they assess they cannot wait for the legal Duty Suspension process by paying the applicable import taxes—or wait for a decision after providing the requested information.” BYD, meanwhile, stated that it has “supplied all necessary clarifications to the MDIC and is working towards a joint solution.”

The machinery halted at the Bahia port represents around 15% of the total capacity planned for the Camaçari plant. According to BYD, production cannot begin without these items, as they are essential for Camaçari’s initial operations.

The plant is expected to have an initial capacity of 150,000 units yearly, with a target of reaching 300,000 by 2028. Baldy noted that BYD also has two more plants planned for the site: one dedicated to battery production, set to begin construction in early 2025, and another for light trucks, slated to launch next year. “We hope the delay in equipment clearance won’t impact this timeline, but there’s still significant construction ahead.”

The company is also considering clearing the machinery without the tax exemption, as prolonged storage costs may outweigh the tax incentives. Baldy didn’t specify the cost but mentioned it amounts to “millions.”

Last week, President Luiz Inácio Lula da Silva, at an event for Camaçari mayoral candidate Luiz Caetano, addressed the situation, promising to work toward freeing up the machinery. “Because I want jobs and wages in Camaçari, and beyond that, the company is building 4,000 homes for workers here. So, no one but God can say we won’t have this plant up and running, producing electric cars, batteries, buses, and whatever else we need,” Lula stated.

Source: Terra

https://www.terra.com.br/economia/byd-reclama-de-maquinas-paradas-em-porto-na-bahia-e-diz-que-pode-atrasar-producao,682f08c9c14b42d419c6941c7ef8565e4fdvdv03.html?utm_source=clipboard

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