A flood of electric vehicles from China boosted Brazilian car imports in the first quarter of 2024, ahead of rising import tariffs aimed at protecting local production.

Between January and March, passenger car imports rose 46.4% from the same period last year to $1.5 billion, according to data released on Thursday by the Ministry of Development, Industry, Trade, and Services.

Chinese vehicles alone accounted for around 40% of the total, with imports surging 450% from the same quarter of 2023.

"These purchases from China that are driving the increase in vehicle imports are mainly of electric and hybrid engines," said the ministry's statistics coordinator, Saulo Castro.

Import taxes for electric vehicles had been reduced to zero since 2015, but President Luiz Inacio Lula da Silva is restoring them this year to encourage development of the domestic auto industry.

Importation of 100% electric vehicles (EV) became subject to a 10% tax since January, which will increase to 18% in July and eventually reach 35% in July 2026.

Hybrid vehicles started the year with a 15% import tax, which will rise to 25% in July and reach 35% by July 2026.

It is natural for importers to ramp up vehicle imports ahead of a tax increase, said the ministry's statistics director, Herlon Brandao.

"This tariff will reach 35% and industries are also setting up in Brazil, so this growth will eventually slow down given this scenario," he added.

Marcelo de Godoy, head of the vehicle importers association Abeifa, flagged growing EV appetite in Latin America's largest economy, in both general and premium segments.

"The entry of the Chinese helps to meet this demand," he told Reuters.

Chinese automakers BYD and GWM have announced a series of investments for local electric car production since last year.

According to the Brazilian Electric Vehicle Association (ABVE), sales of electrified cars in Brazil rose 145% in the first quarter compared to the same period the previous year, to 36,090.

BYD led the pack (14,939), followed by GWM (5,735) and Toyota (5,049).