BYD (HKG:1211, SHE:002594) is looking to construct a new production facility in Brazil within the next three years amid an increase in demand for electric buses, the South China Morning Post reported Thursday, citing Marcelo Schneider, the EV company's Brazil's director for commercial vehicles.

The expansion is seen to increase output, create hundreds of jobs, and boost exports across South America, the report said.

The EV giant has assembled electric bus chassis at its factory in Campinas, Sao Paulo, Brazil, since 2015, with production reaching 600 only over the last 10 years due to slow adoption of electric buses and pandemic disruption, the report said.

BYD is set to produce 1,200 bus chassis in 2026 alone, the SCMP said.

Shares in BYD fell 2% in Hong Kong and 1% in Shenzhen during morning trading on Thursday.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)