Brazilian President Luiz Inacio Lula da Silva is set to visit China next week to promote a potential deal between Chinese electric vehicle maker BYD and Ford’s former factory in northeast Brazil. The factory, located in Bahia state, has been inactive since Ford ceased production in Brazil in 2021.
BYD signed a letter of intent with the Bahia government in October 2021, indicating their interest in investing $570 million to set up electric vehicle production in the Camaçari industrial park. Since then, negotiations have been ongoing, and BYD executives expressed hope in November that a final agreement could be reached by the end of 2022.
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The success of the deal is dependent on a final agreement with Ford, which still owns the Bahia plant. Sources close to the negotiations have revealed that talks are still underway, with BYD executives determined to make the investment pending a final deal.
A source close to BYD stated that their hands are tied until they finalize the deal with Ford, but negotiations are in the final stages. Meanwhile, a Brazilian diplomat, who requested anonymity, revealed that Lula is eager to make a significant announcement regarding the factory during his upcoming trip to China.
“For the Chinese, it is important to set up in Bahia because even if they don’t take advantage of the structure as much, they are Chinese replacing Americans,” the diplomat said, highlighting the significance of the deal.
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This investment from BYD could potentially revive the factory, which is capable of producing up to 300,000 vehicles per year. For Lula, the former union organizer for autoworkers, the deal represents a significant step towards combating deindustrialization fears in Brazil.
As negotiations continue, the deal between BYD and Ford has the potential to reshape the automotive industry in Brazil and cement China’s position as a major player in the electric vehicle market.
