Chinese automakers are expanding in Brazil, posing a growing threat not only to the South American country’s economy, but also to its security. The main concern is that Beijing could use electric vehicles (EVs) technology for surveillance operations and threaten national security.
In a recent report, the British think tank China Strategic Risks Institute (CSRI) warns that Chinese EVs contain software and sensors that can be accessed and controlled remotely. This not only carries risks of espionage and hacking, but also of complete loss of control. “All this data is continuously transmitted to a cloud data center to which the car manufacturer has access,” the report says. Under national security and intelligence laws, Chinese electric vehicle manufacturers and companies in their supply chain must “assist, support and cooperate with national intelligence efforts.”
Chinese company BYD recently loaned its cars to important Brazilian institutions, such as the Planalto Presidential Palace and the Supreme Court of Justice. “It is a dangerous and unfair practice because BYD can access information about important public figures as well as having an image advantage,” André Marsiglia, a Brazilian lawyer and professor of constitutional law, told Diálogo.
According to the CSRI report, “Chinese electric vehicles report their geolocation and performance data in real time, allowing a hostile state to track the movements of government vehicles […]. When combined with other information, this data could provide intelligence. In addition, by synchronizing a mobile phone with a car’s audio system, manufacturers can access personal data, including phone messages, contacts, files, and perhaps even the user’s banking data.”
The planned integration of Chinese artificial intelligence software, such as DeepSeek, into new Chinese EV models will worsen data security concerns, given that DeepSeek has already faced restrictions in several countries, CSRI added.
As such, China’s strategy of flooding Brazil with EVs in recent months is worrisome. In early March, the ship Explorer No. 1, owned by BYD, docked at the Aracruz Port, in the Brazilian state of Espirito Santo, with 5,524 electric and hybrid vehicles. The volume represents a third of the total electric and hybrid vehicles sold in January in Brazil, according to the National Association of Motor Vehicle Manufacturers (ANFAVEA).
In May 2024, the Suape Port, in Pernambuco state, registered a record number of arrivals: 5,459 Chinese cars. When they do not use their own ships, Chinese companies saturate the existing container market and congest port warehouses.
The official reason for this invasion is to take advantage of Brazil’s tariff reduction, currently at 18 percent, but set to return to 35 percent in 2026. In reality, the strategy is to saturate the market with cheap prices and control it. According to ANFAVEA, Brazil imported 40,000 vehicles from China in 2023 and three times that number in 2024 or 120,000.
Chinese production in Brazil
In Brazil, China not only exports its cars, but also plans to build factories. BYD bought the former Ford factory in Camaçari, in Bahia state, while in Campinas, São Paulo state, it has been producing buses since 2015. In 2021, Great Wall Motor (GWM) took over a Mercedes-Benz plant in Iracemápolis, in São Paulo, and announced that it will start producing hybrid models starting this May. Guangzhou Automobile Group Co. (GAC) also announced its arrival in Brazil on its social networks. Its project in the South American country is to create its own technological hub, with factories, research, development centers, and component distribution.
This expansion is already threatening local supply chains. BYD recently confirmed that it has acquired the exploration rights to two lithium reserve lots, essential for EV batteries, in the Jequitinhonha Valley in Minas Gerais state.
Given the rapid growth of Chinese-made EVs in the Brazilian market, there is a risk that Brazil could be seen as a dumping ground and a potential back door to the South American market. However, the environmental impact of Beijing-made cars is an issue that is starting to take its toll, particularly concerning batteries, which are also starting to be produced in Brazil. BYD, for example, has been operating in the Manaus free trade zone since 2020, assembling batteries mainly for electric buses at its factory in Campinas.
A 2022 study by the Veiga de Almeida University in Rio de Janeiro warns that by 2030, Chinese EV batteries could be responsible for some 43,000 tons of hazardous waste in Brazil, due to the presence of toxic substances. There is also the issue of high probability of explosions and fires.
“Strategies for their disposal are needed, not only by the public sector, but also by the Chinese manufacturers themselves,” Carlos Eduardo Canejo, one of the authors of the study, told Agência Brasil.
Unfair practices
In addition to the environmental problems, companies like BYD have landed on the radar of the Brazilian justice system with accusations of slave labor. In December 2024, the Brazilian Ministry of Labor accused Jinjiang Group, BYD’s Chinese subcontractor, of subjecting 163 Chinese workers to degrading working conditions. They had been brought to Brazil to build BYD’s factory in Camaçari, in Bahia state.
“Our laws punish those who force people to work in degrading conditions. In addition to the inhumanity toward the workers, this story also reveals the imbalance in labor costs between Chinese and Brazilian companies, to the detriment of our national market,” Marsiglia said. The accusations of slave labor go back to China, where, according to nongovernmental organization Human Rights Watch, Chinese car manufacturers are involved in the forced labor of Uyghurs.
Unions also fear that Chinese companies will undercut local workers’ wages, which could lead to job insecurity and a general degradation of working conditions in the sector.
Meanwhile, ANFAVEA has announced that it will report car companies such as BYD and GWM to the Brazilian authorities for dumping. The concern is that they are selling products at such a low price that they are taking large chunks of the market away from other players in the sector. There are also fears of increased economic dependence on Beijing and increased economic vulnerability for Brazil.
In a report, the European Council on Foreign Relations warns that the security challenge of Chinese-made EVs may be as great as or even greater than that of 5G networks, and stresses that these vehicles are not just cars. “Who controls these data flows and software updates is far from a trivial question, the answers to which encroach on matters of national security, cybersecurity, and individual privacy,” the report states.
For its part, the CSRI recommends that Chinese EV companies be required to commit to not transferring data to China under any circumstances and to allow periodic inspections of their data storage operations as proof that they are not covertly transferring data to clouds or servers in China, among other recommendations.
“Such a measure should be described at a bare minimum as ‘reciprocity,’” CSRI said. “Since October 2021, China has enforced similar stringent data requirements for non-Chinese technology companies operating in the country, which are required to share their source code and commit to keeping data within the country.”
