Brazilian ports have been clogged this year with more than 70,000 unsold Chinese electric vehicles (EV), in a sign of how hard it is becoming for China’s carmakers to keep up their robust growth.
Companies such as BYD and Great Wall Motor have global ambitions, and Brazil has become a crucial proving ground with many other large economies turning towards protectionism. The country is the world’s sixth-biggest car market and success there may boost prospects across the region.
But after taking Brazil’s nascent EV sector by storm, China’s carmakers are facing increasing challenges. The glut of cars at the ports stems from them trying to avoid new tariffs. Domestic competitors have responded with additional electric options and investment. Plus, the country’s EV growth rate is cooling, like much of the world.
The “honeymoon is over now”, said Alexander Seitz, executive chairman of the South American unit of Volkswagen, which has been selling cars in Brazil since the 1950s and produces some of the country’s top-selling combustion-engine models.
BYD is on pace to surpass US$100 billion in sales this year, and Brazil is a big part of that. It’s the company’s largest overseas market by a wide margin, as it faces pushback from governments in the US and Europe.