By Luciana Magalhaes
SAO PAULO, June 16 (Reuters) - Chinese electric carmaker BYD is scaling up battery production in Brazil, a senior executive told Reuters, as it pushes deeper into local manufacturing and prepares to invest about $100 million in energy storage systems to support the national grid.
The expansion is part of a broader push to reach 50% domestic content in its Brazilian-made cars by the start of 2027, Alexandre Baldy, senior vice president of BYD Brazil, said in a Monday interview.
"We are localizing," Baldy said, "so that we can truly become a Brazilian manufacturer. The battery is one more item, an important component."
To meet government requirements and ease its tax burden, BYD is ramping up local sourcing at its plant in Bahia state, aiming to become the best-selling car brand in Brazil by 2030. BYD is already among the top five brands in the country.
The rollout of passenger car battery production is part of an existing plan to invest 5.5 billion reais ($1.08 billion) in its flagship plant in Camaçari, Bahia. Separately, BYD is investing between 50 million and 60 million reais to expand a line producing bus batteries.
The company is also preparing to invest up to 500 million reais ($98 million) in a new production line for its Battery Energy Storage System (BESS), used to store electricity for the national grid, ahead of the first auction introducing industrial-scale batteries in December.
Battery storage systems like the BESS units planned by BYD are seen as key to resolving a crisis among solar and wind energy generators in Brazil, which have suffered heavy losses and halting investments because the national grid cannot absorb their output at peak hours, forcing some generation to be curtailed.
"This truly opens a new frontier for a new battery segment," Baldy said. BYD will decide in the next 90 days whether to use the BESS investment to add a production line at its Manaus plant, currently focused on bus batteries, or to build a new facility elsewhere.
While the Chinese automaker has invested in mineral rights for plots in a lithium-rich part of Brazil, the company has no plans to develop those areas for the time being, given the low price of the mineral that is used in battery production.
"It is not in our plans, nor is it a subject of internal discussion," he said. "We are focused on consolidating our passenger car factory for BYD vehicles and investing to expand our electric bus manufacturing capacity as well."
($1 = 5.0925 reais)
(Reporting by Luciana MagalhaesEditing by Brad Haynes and Sanjeev Miglani)
