SAO PAULO -- BYD Co. will start selling two new electric vehicles in Brazil this month, betting on favorable political and environmental developments in Latin America's largest vehicle market, the company said.
"I believe now is the right time politically and environmentally for us to invest in building these new technologies in Brazil," BYD Americas President Stella Li said in an interview during the launch of the two crossovers on Wednesday.
The vehicles are the hybrid Song and the totally electric Yuan. They will be imported until new factories to make them in the northeastern state of Bahia start operations.
"But it will be a very challenging process and we need a government that has an open mind for technology to grow here," Li added.
President-elect Luiz Inacio Lula da Silva, who takes office on Jan. 1, has promised to overhaul Brazil's environmental policies, and his program for the election he won in October calls for industries focused on a "green economy" and the need to modernize the auto industry with hybrid.
In October, BYD signed a letter of intent with the government of Bahia with an eye to setting up vehicle production in the industrial area left by Ford Motor Co. when it closed a factory outside the capital of Salvador.
The Bahia government said BYD would build electric bus and truck chassis, as well as electric cars and hybrids at three plants with an investment of 3 billion reais ($550 million), and also process Brazilian lithium for vehicle batteries for export to China.
Two of the plants will go online in 2024 and the third in 2025, the Bahia government said at the time.
Li declined to give details and said a decision on the project should be made by the end of this year.
Asked about the risk posed by Brazil's history of political, economic and legal turmoil, she said BYD "has a lot of patience with Brazil."
"We have been in Brazil for almost 10 years. We have experienced many political changes in this period, in addition to exchange rate fluctuations, and inflation. But I think that in the long term, Brazil has its own advantages," Li said.
She cited the size of the Brazilian market, availability of raw material for batteries such as lithium, and a new government that appears to be more open to encouraging the sector.
"We are at a very good moment to start to expand technologies here ... and in time Brazil will be able to develop its own industry" for electric and hybrid vehicles, she said.
BYD expects that 10 percent of all vehicle sales in Brazil will be electric and hybrid models by 2025, compared to the current 2.4%, and the EV market share could jump to 30 percent by 2030.
Li pointed to the tax burden as one of the main factors behind the high prices of electric and hybrid vehicles in Brazil compared to other markets.
"If you charge high taxes, you kill the baby before it can grow," she said.