Brazilians offer fresh perks for BYD plant as Ford talks stall -sources

By Lisandra Paraguassu

BRASILIA (Reuters) – Brazilian officials are offering fresh incentives including land for Chinese manufacturer BYD to build an electric car plant in Bahia state amid stalled talks to take over a closed Ford plant, said three people familiar with discussions in Shanghai on Thursday. 

Brazilian President Luiz Inacio Lula da Silva met with executives from BYD while visiting China, where he will meet with President Xi Jinping on Friday.

The sources, who requested anonymity to discuss the talks between BYD and the Brazilian delegation, said the Chinese firm would keep negotiating with Ford to take over the Bahia factory closed in 2021 and inherit state tax incentives for the complex.

However, Brazilian officials on Thursday discussed an alternative site in Bahia where BYD could build a factory from scratch if the talks with Ford prove futile.

Ford and BYD did not immediately respond to requests for comment.

BYD made it clear they would have no issue setting up a new plant, the sources said.

“They pointed out that sometimes adapting a site is more time consuming than doing it from scratch,” said one of the Brazilian attendees.

In October, BYD signed a letter of intent with the Bahia government signaling plans to invest 3 billion reais ($570 million) to set up electric vehicle production in the Camacari industrial park, which has capacity to manufacture some 300,000 vehicles per year.

Executives at BYD, which sells more electric cars than Tesla (NASDAQ:) in Asia but lags in other regions, told Reuters in November they hoped to reach a firm agreement on the Bahia plant by the end of 2022.

However, drawn out talks with Ford have stalled plans.

A person close to BYD said in March that documents for the final signing of the agreement had been sent to Ford executives in the U.S., and that there were “no obstacles” to the negotiations at that time.