BYD proposes IPVA exemption for electric cars; Bahia is the first state to join

2023-10-13 06:01:00

BYD, a Chinese automaker that took over the Ford factory in Camaçari, Bahia, wants to negotiate with the states the possibility of exemption from the Motor Vehicle Property Tax (IPVA) on electric vehicles. This tax, which is the responsibility of state governments, is charged annually on automobiles, varying from region to region.

In the state of São Paulo, for example, the rate charged by the Finance Department is 4% of the car’s market value, calculated according to the official table published by the Fundação Instituto de Pesquisas Econômicas (FIPE). The Asian giant’s proposal is to discontinue payment of this tax for EV owners.

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This information was confirmed by BYD’s vice president for the Americas, Stella Li, in an interview with the newspaper O Globo. Li says that the automaker intends to start negotiations “with all states in the country” seeking exemption from IPVA for electric vehicles. The company is in dialogue with all states seeking a complete end to the tax or, at least, a discount and more benefits.

Bahia exempted owners of trams that cost up to R$300,000 from the state’s IPVA, but the Bahian government’s decision was not followed by other administrations. Without the exemption, the owner of an EV with a market price of R$300,000 would pay R$7,500 in IPVA annually, considering the 2.5% rate charged by SEFAZ BA.

The executive also claims to be negotiating with states and the private sector the possibility of increasing the charging infrastructure in Brazil with the installation of more charging points. The country currently has a network of chargers restricted to capitals and large urban centers, but Li hopes to change this in the coming years.

In 2023, BYD announced an investment of R$3 billion in Bahia, taking over the factory that previously belonged to Ford, a North American company that ended its activities on Bahia soil by selling the unit to the local government.

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