Tax rate for purchases of models abroad will increase from 10% to 18% in July; the tariff will reach 35% by 2026
The cost of importing electric vehicles into Brazil will increase starting this Monday (July 1, 2024). The tax rate for purchasing these cars abroad will rise from the current 10% to 18%, according to the schedule initiated by the president’s government. Luiz Inácio Lula da Silva (PT).
This growth does not mean that the price of vehicles at dealerships will be higher, as brands have stocks of vehicles. Given the predictability of the tax resumption schedule, many companies brought forward imports to maintain the pace of sales.
The increase in the import tax also affects hybrid vehicles, plug-in vehicles and electric trucks, but in different amounts.
Taxation on electrified vehicles will increase progressively until July 2026.
Read below the schedule for resuming the Import Tax on hybrid and electric vehicles approved last year:
By 2024, sales of 100% electric vehicles have increased their share in the overall automotive sales picture. As shown by Power360the sale of electric vehicles in Brazil surpassed the number of units sold in 2023 in May this year.
According to data from Anfavea (National Association of Automotive Vehicle Manufacturers), around 26,000 100% electric cars were registered in the first 5 months of 2024, which represents an increase of 34% compared to the total for last year.
For the first time in the history of the Brazilian automotive sector, electric vehicles are expected to surpass a share of more than 1% of all car sales in Brazil in the consolidated figure for the year. From January to May 2024, electric vehicles represented 3% of the sales market in the country.
With an eye on this growth in the share of imported electric vehicles, especially from China, in the Brazilian automotive market, Anfavea is asking the government to bring forward the 35% rate, which would only be reached in 2026, as soon as possible.
To the Power360the president of Abve (Brazilian Electric Vehicle Association), Ricardo Bastos, said that he considers the request for an increase in the import tax on electric cars a “absurd”.
In the executive’s view, an anticipation of taxation would break the investment predictability of companies that already articulate investments in the country.
Furthermore, Bastos stated that it is still too early to evaluate the public policy of the regressive increase in taxation on imports of these vehicles. He declared that the increase of 8 percentage points in the rate is already “quite expressive” and will guide the effectiveness of the measure for the coming months.
Regarding the sector’s performance in 2024, Bastos said that he estimates a volume of 150 thousand electric cars sold by the end of the year. This number represents an 80% growth compared to that recorded in 2023.
As for next year, Bastos stated that two automakers should start operating their factories in Brazil in the first half of the year: BYD, in Camaçari (BA), and GWMin Iracemápolis (SP).
The president of Abve informed that new investments from these automakers for the country should be made within the next few weeks, as the companies were awaiting the sanction of the program To move (Green Mobility and Innovation) to intensify the contribution of resources in Brazil.
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