BYD’s presence in Mexico is faltering. After consolidating its position in its home market, the company has sought a way to make the leap to the West. In Europe, it has an ally to sell its cars, with a strong presence in the electric segment. And on the American continent, things seemed impossible in the US, but not in Mexico. The goal? Open a plant in Mexico and sell cars in the United States, evading tariffs.
The reality may be very different. Trump’s arrival is causing a tariff earthquake, and a Financial Times report points to China as the cause of the delay in BYD’s arrival in Mexico. The reason? It fears its technology will leak… to the United States.
Expansion. BYD is one of the heavyweights of the Chinese electric car industry. It has been seeking to expand beyond the Asian giant’s borders for months, and Europe has become a very attractive market. Not only for selling cars, but for manufacturing them, something in which Spain aims to be a crucial player.
According to data from Jato Dynamics, BYD sold just over 50,000 vehicles in Europe in 2024, but while it didn’t rank among the top 30 best-selling brands, it did surpass established brands like Alfa Romeo. Furthermore, forecasts for 2025 are optimistic: 200,000 registrations this year and 400,000 by 2029.
The plan. With a promising future in Europe, the other big target was the Americas. They were going to have a very difficult time in the United States due to the government’s protectionist measures, but what they did have in mind was to open factories in Mexico. The latest official information—from Ray Zou, president of BYD in Mexico—was that the manufacturer would focus on the production of electric cars, and what seemed like a U-turn: they were abandoning manufacturing and looking to the United States to focus on selling cars in the Latin American country.
The plans were vague, but three states were targeted as finalists for the factory location (Jalisco, Nuevo León, and Durango), as well as a $1 billion investment, as Motorpasión points out:
Having an initial production capacity of 150,000 vehicles per year.
Having the capacity to scale this figure to 400,000 or 500,000 units per year.
Creating approximately 10,000 direct jobs.
Doubts. Ray Zou reaffirmed his intention to open a plant in Mexico by 2025, something also supported by Jorge Vallejo, the company’s general manager in the country. Now, although Mexico is struggling to attract foreign investment in the technology sector, President Claudia Sheinbaum raised doubts at the end of 2024.
Shortly after Trump’s reelection as US president, the president stated, as reported by Bloomberg, that there was no firm proposal from any Chinese company to establish itself in the country. As reported in the Financial Times, market analysts comment that Mexico obviously wants to attract Chinese investment, but it must also safeguard its trade relationship with the US, its main customer.
Change of plans? Given the context, we come to the present. In a recent interview with the Financial Times, Stella Li—BYD’s executive vice president—stated that they hadn’t decided what to do with the facilities in Mexico. It was the executive who commented that she would select a Mexican location for the group’s factory, and now she asserts that “every day there’s different news, so we just have to keep doing our job.”
“We need to do more studies to see how we can improve to deliver the best results for everyone,” Li concluded.
Jealousy. And now we enter the second part of this story. On the one hand, the official statements, and on the other, those obtained by the Financial Times from anonymous sources, who claim that the reason for the delay at BYD’s Mexican plant is not due to decisions by the company itself or the Mexican government, but rather by the Chinese government.
For a company to open a plant abroad, it must obtain a permit from the Chinese Ministry of Commerce, and according to these sources, such a permit has not yet been granted. There are two reasons. On the one hand, there is the cooling of relations between Mexico and China due to US influence and reciprocal tariffs between the Chinese and North American giants.
On the other hand, there is the fear that BYD’s advanced technology and know-how will fall into the hands of the United States. The source points out that “the Ministry of Commerce’s greatest concern is Mexico’s proximity to the United States.” Thus, what worries China is that Mexico has unrestricted access to what is allowing BYD to gain a foothold in the global market.
Priorities. The interest must remain, because if we spoke positively about 50,000 sales in Europe, Mexico is not far behind. An estimated 40,000 cars were sold last year, and we have already seen that initial forecasts are generous. The problem is geopolitics, the Chinese government’s zeal for its technology, and the fact that priorities have changed.
Thus, Beijing is reportedly prioritizing greenlighting projects in countries that are part of the new Silk Road, President Xi Jinping’s grand ambition. Only time will tell, but BYD sold more than 4.3 million hybrid and electric vehicles last year, is introducing advanced driving systems like God’s Eye, and doesn’t appear to want to limit its expansion solely to the European market.
Source: xataka
