The Beijing administration is delaying approval for the electric vehicle manufacturer BYD to establish a factory in Mexico, over concerns that the smart car technology developed by China’s largest electric vehicle producer could leak across the border into the US.

BYD initially announced plans in 2023 to build a car factory in Mexico, with intentions to also produce vehicles in Brazil, Hungary, and Indonesia. The Mexico factory was projected to employ 10,000 people and produce 150,000 vehicles annually.

However, according to two individuals familiar with the matter, local car manufacturers require approval from China’s Ministry of Commerce to produce overseas, and the ministry has not yet granted this approval.

Officials fear that Mexico would grant unrestricted access to BYD’s advanced technology and know-how, potentially even allowing the US to access it. One of these individuals told the Financial Times, “The biggest concern for the Ministry of Commerce is Mexico’s proximity to the US.”

According to these individuals who spoke to the Financial Times, Beijing is also prioritizing projects in countries that are part of China’s Belt and Road Initiative infrastructure development program.

Changing geopolitical dynamics have also contributed to the cooling of relations with Mexico. Mexico attempted to maintain relations with Donald Trump, who threatened exports and employment by imposing customs duties on cross-border trade.

Trump also initiated a trade war with Beijing, imposing customs duties on imports from China. In retaliation, Beijing imposed customs duties on approximately $22 billion of US goods, primarily targeting America’s agricultural sector.

Trump’s team accused Mexico of being a “back door” for Chinese goods to enter the US duty-free through the North American Free Trade Agreement. The Mexican government denies this, but responded to US pressure by imposing customs duties on Chinese textile products and initiating anti-dumping investigations into steel and aluminum products originating from China.

The second individual stated, “The new government in Mexico has further complicated the situation for BYD by adopting a hostile stance towards Chinese companies.”

In November, shortly after Trump’s re-election, Mexican President Claudia Sheinbaum stated that there had still been no “definite” investment offer from any Chinese company to establish operations in Mexico, despite BYD reaffirming its intention to invest $1 billion earlier that month.

Gregor Sebastian, a senior analyst at the US-based consulting firm Rhodium Group, noted, “The Mexican government clearly wants to receive some investment [from China], but its trade relations with the US are much more important.”

Sebastian stated that it would not be “commercially logical” for BYD to currently expedite the construction of a production facility in Mexico, noting that the absence of a robust automotive supply chain would force BYD to import numerous components from China, which would be subject to higher customs duties.

When asked whether US customs tariffs and Mexico’s tougher stance against China had halted the company’s plans, BYD Vice President Stella Li stated that “they had not yet made a decision regarding the Mexico plant.”

Last year in February, Li had said that they would choose a location for the factory by the end of 2024.

BYD reported selling over 40,000 vehicles in Mexico last year. The company stated that it aims to double its sales volume in 2025 and open 30 new dealerships in the country.

BYD sold 4.3 million electric and hybrid vehicles worldwide in 2024 and introduced the “God’s Eye” advanced driving system in February, planning to install this system in its entire model range.

Earlier this month, Tesla’s biggest competitor raised $5.6 billion from the sale of shares in Hong Kong, with the proceeds expected to support its overseas expansion.

Shares of BYD, China’s electric vehicle (EV) champion, hit a new record high on Tuesday after its founder, Wang Chuanfu, claimed their EVs can now charge as quickly as filling a car with traditional fuel.

BYD, a rival to Tesla, saw its shares rise by over 6% in early trading in Hong Kong, reaching HK$408.80 (approximately $52.62) per share, marking an approximate gain of 85% over the last 12 months.

The company’s billionaire founder, Wang, stated on Monday that the new charging system developed by the Shenzhen group for BYD’s own EV batteries can add approximately 470 km of range in five minutes.

This claim suggests that BYD has surpassed competitors like Tesla and Mercedes-Benz in fast-charging technology, although the new system depends on several preconditions, including sufficient voltage at charging stations.

There is increasing competition among EV and battery manufacturers to establish faster charging infrastructure to help alleviate consumer concerns about the driving range and charging speed of EVs compared to traditional internal combustion engine vehicles.

According to Chris Liu, a Shanghai-based senior analyst at Omdia consulting, China is estimated to install approximately 460,000 new public EV chargers this year, accounting for about two-thirds of the global total, bringing cumulative units to approximately 2.1 million.

BYD’s recent share price increase comes a month after the company shook the global automotive industry by launching a free advanced autonomous driving system, dubbed “God’s Eye,” which it plans to install in its entire new car series.

These moves put further pressure on Elon Musk’s Tesla and Germany’s Volkswagen, as well as a host of domestic competitors, who have been losing market share as EV sales have exploded in China in recent years.

According to data from Automobility, a consulting firm in Shanghai, BYD already holds approximately 35% of the Chinese EV market. It has an 18% share in the pure battery EV segment and a 56% share in the plug-in hybrid segment.

China’s largest telecom software infrastructure provider says that working with artificial intelligence (AI) startup DeepSeek is helping the company develop its own AI capabilities, which it will use to expand in Southeast Asia, Africa, and the Middle East.

AsiaInfo Technologies CTO Ouyang Ye said in an exclusive interview with Nikkei Asia that the company’s collaboration with DeepSeek began well before it rose to global prominence earlier this year with a low-cost approach to developing AI models.

Ouyang said that AsiaInfo also works closely with other top-tier Chinese large language models (LLMs) such as Alibaba Cloud’s Tongyi Qianwen and ByteDance’s Doubao, but that the rise of the open-source DeepSeek model is what facilitates and accelerates the deployment of the company’s various AI solutions.

“Our telecom infrastructure software solutions for China Mobile, China Telecom, and China Unicom fully support DeepSeek’s model,” said Ouyang, referring to the country’s three major telecom providers. He said that his company was the first in the industry to embed and fully support DeepSeek.

According to research by AsiaInfo and Tsinghua University, DeepSeek’s model performs well in specialized technical areas such as monitoring network failures and optimizing wireless communication performance.

The CTO said that, for example, China Unicom’s Guangdong subsidiary used AsiaInfo’s DeepSeek-enhanced solutions in February to optimize service efficiency. This initiative reduced training costs by 75%, enhanced AI assistant capabilities, accelerated response times by 200%, and increased the efficiency of human-machine collaboration by 40%.

Hong Kong-based AsiaInfo, a leading telecom software infrastructure solutions provider, competes with US-based Amdocs, India’s Infosys, and Poland’s Comarch. Some network equipment makers like Huawei, HPE, Cisco, and Nokia also provide some software services.

In addition to infrastructure software, AsiaInfo also provides business and operations support systems, such as network monitoring software and customer and billing management, including processing telecom billing information for China’s 1.4 billion population.

AsiaInfo is also the largest software provider for China’s 5G private networks, serving the country’s leading energy providers and steelmakers, such as China Nuclear Group and Shougang Group, as well as miners and wind farm operators. Private networks are set up by businesses or organizations to provide on-site connectivity to facilitate services like factory automation.

Ouyang is optimistic that AsiaInfo can leverage AI to boost its overseas expansion, and that 5G private networks are expected to be a significant growth driver in the Middle East, Africa, and Southeast Asia. The majority of AsiaInfo’s business is in China, and going overseas is one of the company’s core strategies for growth.

“This year, the growth potential in the overseas market is quite large, especially in the fields of mines, ports, and energy, where we have more specific domain expertise,” the senior executive said.

AsiaInfo Chairman and CEO Edward Tian previously stated that the traditional telecom market and spending have slowed in 2024, but the adoption of AI and LLMs has become a key growth driver for the company as customers begin to adopt these technologies in their services.

AsiaInfo says its software can run on servers and other hardware from different companies, including Nvidia, Huawei, and Hygon.

While leading Chinese tech companies and government agencies are adopting DeepSeek, some governments, such as Italy, Australia, Canada, and South Korea, are banning its use on official devices.