One of the biggest assumptions in the U.S. debate is that allowing Chinese EVs into the market would automatically destroy domestic manufacturing. Brazil's experience suggests something far more complicated.
Brazil reduced barriers to EV imports, allowing Chinese manufacturers to compete. At first, companies like BYD and GWM simply imported vehicles. But as demand grew, they didn't just keep exporting—they began investing in local production.
Instead of building entirely new factories, many Chinese manufacturers reused plants abandoned by legacy automakers.
BYD is taking over Ford's former industrial complex in Camaçari (Bahia).
GWM acquired Mercedes-Benz's former factory in Iracemápolis (São Paulo) and has already started local production.
Geely partnered with Renault for production and distribution in Brazil.
GAC announced investments in Brazil through a partnership with HPE Automotores, Mitsubishi's representative in the country.
Rather than replacing Brazilian industry, Chinese manufacturers are putting idle industrial assets back into operation.
Ford is probably the best example of why the debate is more complex than many assume.
Many people outside Brazil claim Ford left because of government policy. That simply isn't true.
Ford itself explained that the closure of its Brazilian passenger car plants was part of a global restructuring after years of weak profitability and excess production capacity in South America. Today Ford still sells vehicles in Brazil, but most are imported. Its only remaining manufacturing operation in South America is now the Ranger plant in Argentina.
Ford's strategy also changed globally. After nearly 50 years, the company discontinued the Fiesta in 2023 to focus on SUVs, pickups and electrification.
Ironically, even Ford increasingly depends on Chinese partnerships in some markets. The Ford Territory sold in Brazil is based on a vehicle developed through Ford's Chinese joint venture.
This isn't unique to Ford.
GM now sells electric vehicles in Brazil based on Chinese platforms developed with SAIC-GM-Wuling.
Toyota, Nissan and Honda have all expanded partnerships with Chinese manufacturers because China has become the global leader in batteries, EV supply chains and affordable electric vehicles.
Even Japanese automakers are finding it increasingly difficult to compete with Chinese manufacturers inside China itself.
Brazil also demonstrates something that often gets overlooked.
Competition forced traditional manufacturers to adapt instead of simply disappearing.
Peugeot and Citroën have grown after joining Stellantis.
Renault is moving toward higher-value products while partnering with Geely.