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\u2019s largest electric vehicle producer could leak across the border into the US.<\/p>\n
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.<\/p>\n
However, according to two individuals familiar with the matter, local car manufacturers require approval from China\u2019s Ministry of Commerce to produce overseas, and the ministry has not yet granted this approval.<\/p>\n
Officials fear that Mexico would grant unrestricted access to BYD\u2019s advanced technology and know-how, potentially even allowing the US to access it. One of these individuals told the Financial Times<\/em>, “The biggest concern for the Ministry of Commerce is Mexico\u2019s proximity to the US.”<\/p>\n According to these individuals who spoke to the Financial Times<\/em>, Beijing is also prioritizing projects in countries that are part of China\u2019s Belt and Road Initiative infrastructure development program.<\/p>\n 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.<\/p>\n 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\u2019s agricultural sector.<\/p>\n Trump\u2019s 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.<\/p>\n The second individual stated, “The new government in Mexico has further complicated the situation for BYD by adopting a hostile stance towards Chinese companies.”<\/p>\n In November, shortly after Trump\u2019s 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.<\/p>\n 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.”<\/p>\n 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.<\/p>\n When asked whether US customs tariffs and Mexico\u2019s tougher stance against China had halted the company\u2019s plans, BYD Vice President Stella Li stated that “they had not yet made a decision regarding the Mexico plant.”<\/p>\n Last year in February, Li had said that they would choose a location for the factory by the end of 2024.<\/p>\n 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.<\/p>\n BYD sold 4.3 million electric and hybrid vehicles worldwide in 2024 and introduced the “God\u2019s Eye” advanced driving system in February, planning to install this system in its entire model range.<\/p>\n Earlier this month, Tesla\u2019s biggest competitor raised $5.6 billion from the sale of shares in Hong Kong, with the proceeds expected to support its overseas expansion.<\/p>\n","protected":false},"excerpt":{"rendered":" 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\u2019s 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 […]<\/p>\n","protected":false},"author":1,"featured_media":8470,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[4],"tags":[7742,2756,529,4473,5908,319,2172,8138,951,8141,1433,87,3546,1659,8139,8140,2360,2087,1168,821],"class_list":["post-8469","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia","tag-automotive-industry","tag-byd","tag-china","tag-chinese-companies","tag-claudia-sheinbaum","tag-donald-trump","tag-electric-vehicles","tag-factory","tag-geopolitics","tag-gods-eye-system","tag-international-relations","tag-investment","tag-manufacturing","tag-mexico","tag-rhodium-group","tag-stella-li","tag-tariffs","tag-technology","tag-trade","tag-us"],"yoast_head":"\n