China’s BYD Co Ltd is set to establish a new electric vehicle (EV) factory in Mexico, as reported by Nikkei on Wednesday, citing statements from the company’s Mexico head, signifying BYD’s ambition to create an export hub to cater to the United States market.
Renowned for its affordable models and diverse product lineup, BYD recently surpassed its main competitor, Tesla Inc (TSLA.O), to claim the title of the world’s largest EV manufacturer in terms of sales.
According to Nikkei, BYD (002594.SZ) has initiated a feasibility study for the proposed Mexican plant and is presently engaged in negotiations with officials regarding various terms, including the facility’s location. While BYD predominantly concentrates its sales within China, it is actively pursuing global expansion by establishing new plants overseas and augmenting Chinese exports.
Mexico’s robust automotive industry, home to numerous leading global players, boasts close ties with the U.S. automotive sector, making it an attractive location for BYD’s expansion plans.
BYD Mexico country manager Zhou Zou emphasized the importance of overseas production for an international brand, highlighting the company’s strategic imperative to establish a global footprint.
Although BYD’s Mexico office declined to comment on the development, major U.S. automakers have expressed concerns about the potential impact of Chinese vehicles on their market share. Elon Musk, Tesla’s chief executive, has warned that Chinese automakers backed by significant government support could pose a formidable challenge to global rivals, potentially disrupting the U.S. auto sector.
in the same vein, a forthcoming report by the Alliance for American Manufacturing warns of the potential consequences of introducing low-cost Chinese autos into the American market, characterizing it as a significant threat to the U.S. auto industry.
In Latin America, BYD is also making substantial investments, with plans to allocate 3 billion reais ($620 million) towards establishing a new industrial complex in northeastern Brazil. The three-plant complex will be situated in the northeastern Bahia state, repurposing land previously occupied by a Ford plant that ceased operations in 2021.