China's BYD expands electric vehicle operation in Brazil

SAO PAULO, (Reuters) - Chinese automaker BYD Co Ltd 1211.HK002594.SZwill start selling two new electric vehicle models in Brazil this month, betting on favourable political and environmental developments in Latin America's largest vehicle market, the company said.

"I believe now is the right time politically and environmentally for us to invest in building these new technologies in Brazil," BYD Americas President Stella Li said in an interview during the launch of the two SUV models on Wednesday.

The cars are the hybrid Song and the totally electric Yuan. They will be imported until new factories to make them in the northeastern state of Bahia start operations.

"But it will be a very challenging process and we need a government that has an open mind for technology to grow here," Li added.

President-elect Luiz Inacio Lula da Silva, who takes office on Jan. 1, has promised to overhaul Brazil's environmental policies, and his program for the election he won in October calls for industries focused on a "green economy" and the need to modernize the auto industry with hybrid.

In October, BYD signed a letter of intent with the government of Bahia with an eye to setting up vehicle production in the industrial area left by Ford Motor Co F.N when it closed its factory outside the capital Salvador.

The Bahia government said BYD would build electric bus and truck chassis, as well as electric cars and hybrids at three plants with an investment of 3 billion reais ($550 million), and also process Brazilian lithium for vehicle batteries for export to China.