BYD has announced substantial plans to expand battery assembly operations at its recently-opened plant in Bahia state, targeting 50% local content in its Brazil-produced vehicles by early 2027. The announcement covers passenger vehicle battery pack assembly, an expansion of bus battery production at its Manaus facility, and a planned Battery Energy Storage System production line requiring up to BRL 500m (US$98m) in funding. 

The latter opens the door for BYD to move into grid-scale energy storage, opening an entirely new revenue stream for the automaker in Brazil beyond its core automotive business. BYD has already emerged as a major player in the country, despite only being in the market for a relatively short period of time. It accounted for roughly 79% of the country’s electric vehicle market in April 2026; in the first half of the month it was the single largest-selling automaker in terms of retail volume. 

The timing of the latest development is driven by regulatory pressure every bit as much as strategic ambition. Brazil ended preferential import tariffs on semi-knocked-down assembly kits at the end of January 2026—essentially a sweetheart deal for Chinese automakers—raising duties from 18% to 35%. This, to a degree, made BYD’s initial SKD assembly model at Camaçari commercially unsustainable at scale. 

Now, the automaker is transitioning to full manufacturing processes—welding, stamping, painting—from the second half of 2026, and battery pack assembly is the next layer of that localisation. In an interview earlier in 2026, Senior Vice President Alexandre Baldy was direct about his company’s intentions: “We are localising so that we can truly become a Brazilian manufacturer.”

The battery expansion sits within a much broader vertical integration play that BYD has been executing in Brazil since 2023. The company holds mining rights over 852 hectares of lithium-bearing land in Jequitinhonha Valley—Brazil’s so-called “lithium valley”—located within a day’s drive of the Camaçari complex. BYD has, for the time being, chosen not to develop those sites while global lithium prices remain depressed. However, if prices recover or local content requirements tighten further, BYD already has an upstream raw material supply inside the country. An R&D centre near Rio de Janeiro is also being established to handle local product customisation, including flex-fuel plug-in hybrid development for Brazilian market conditions.

The vertical integration architecture BYD is building in Brazil—mining rights, battery production, vehicle assembly, grid storage and local R&D—mirrors the model it has deployed in China and is concurrently attempting in Europe. The difference in Brazil is that its tariff barriers are more gentle than the EU’s, and BYD has inherited a ready-made industrial site from Ford’s 2021 exit. The conditions for BYD to achieve genuine cost leadership in Latin America are arguably more favourable here than anywhere else outside China.

Still, the ambition is not without complications: BYD was placed on Brazil’s Ministry of Labour “dirty list” in 2026 following an investigation into conditions at the Camaçari site, and the company and its subcontractors were ordered to pay around US$7.5m after federal prosecutors found more than 220 Chinese workers held in slavery-like conditions. The reputational damage from that episode is ongoing and sits awkwardly alongside BYD’s positioning itself as a pillar of Brazil’s green re-industrialisation.

The Camaçari plant is targeting 150,000 units by end-2026, with a longer-term capacity of 300,000. With 1.5 million overseas sales targeted globally for 2026, and Brazil ranked alongside the UK and Australia as one of its three largest overseas markets, Brazil is proving increasingly central to BYD’s case that it can build a profitable global business while its domestic market contracts.