South Korean media: Chinese electric vehicles conquer the Brazilian market!

On July 25, South Korean media "Herald Economic" published an article stating that Chinese electric vehicle companies such as BYD are "going out" to seek breakthroughs and are turning their eyes toward South America's Brazil. By emphasizing low-price strategies, they are rapidly expanding their share in the Brazilian electric vehicle market.

According to Reuters, BYD exported about 22,000 cars to Brazil this year alone. Brazil holds a unique position in the global automotive market. The use of by-products of sugarcane as fuel alternatives began in the 1950s, and the oil crises of the 1970s and 1980s, along with environmental policies, led to the widespread adoption of "flex-fuel vehicles (FFV)". The Brazilian government has set a certain ratio of ethanol and gasoline, and currently, 27 liters of ethanol must be mixed into every 100 liters of gasoline. Recently, a plan to increase this ratio to 30 liters was approved and is scheduled to take effect from August.

The effect of this policy is also reflected in sales figures. According to the Brazilian Association of Automotive Manufacturers, FFV vehicles accounted for 83% of new and light commercial vehicle sales in Brazil last year. Among these, diesel vehicles accounted for 9.9%, electric vehicles for 4.3%, and gasoline vehicles for 2.8%. These data are vastly different from the global market and align with the image of an "FFV power". Therefore, global automakers have adopted strategies of localizing models based on FFV fuels and building factories. Hyundai established a factory in Brazil in 2012 and launched the FFV model "HB20", and in just last year, the sales of HB20 and other models exceeded 200,000 units, ranking fourth in sales.

On the other hand, Chinese electric vehicle companies have not challenged the market centered around FFVs, but instead focused on capturing the early stages of the electric vehicle market. An environment with relatively relaxed import regulations is also an opportunity for Chinese companies. Since 2015, the Brazilian government has not imposed tariffs on imported electric vehicles, but has gradually increased them since last year. In January of last year, the tariff rate for electric vehicles was 10%, rising to 18% in July, and it is expected to reach 25% in July this year and 35% in July next year.

Chinese electric vehicles are rapidly occupying the Brazilian market with price as their weapon. Last year, a total of 177,300 electric vehicles were sold in Brazil, an increase of 88.8% year-on-year. BYD ranked first with a market share of 43.3%, followed closely by Great Wall Motor with a market share of 16.5%. Adding Chery (4.1%), these three Chinese brands accounted for 63.9% of the Brazilian electric vehicle market. As of 2023, Chery and Jianghuai Auto ranked first and second respectively among the brands with the lowest-priced electric vehicles in Brazil.

Due to the offensive of Chinese electric vehicle companies, the positions of existing automobile manufacturers are declining. This is because they cannot compete on price. Hyundai sells the Ioniq 5 in Brazil, but sales are limited. Analyst Zhao Zhe from the Korea Institute of Industrial Economy and Trade analyzed: "In developing countries, if they do not have the price competitiveness like BYD, they may even find it difficult to enter the market."

Original text: https://www.toutiao.com/article/1838621421491208/

Statement: This article represents the views of the author.