Report: BYD Plotting New EV Factory in Mexico
China’s BYD is reportedly prepared to set up a new production facility in Mexico with the alleged plan to use the locale as an export hub for the United States.
Mexico has long been a convenient venue for automakers vying to sell products within the Western Hemisphere without having to pay the kind of salaries commensurate with higher living standards. American brands love sending jobs to Mexico, as does every other company interested in moving high volume models through North and South America. With BYD having previously voiced its global aspirations, setting up shop in El Águila Real seems like an obvious play.
Despite frequently marketing itself as a purveyor of all-electric luxury vehicles, BYD actually has a slew of affordable EVs targeting the mass market. It also builds electrified buses, trucks, utility vans, construction vehicles, and mining equipment. It likewise produces plug-in hybrids, with the extremely affordable Qin Plus sedan being its most-popular product. That particular model starts at the Chinese equivalent of $14,000 on the domestic market.
According to a report by Japan’s Nikkei, BYD has already launched a feasibility study for the Mexican plant and is in the process of negotiating with officials on terms and where the facility should be built. While nothing has been decided as of yet, there are rumors that it’s vying for space in Nuevo Leon or perhaps the Bajío region in Central Mexico. However, space in the Yucatan Peninsula was also said to be under consideration.
Mexico has become a major automotive exporter, with some of the world’s largest brands having set up shop there. But it’s also a gateway into the United States, as many of the financial benefits associated with the United States-Mexico-Canada Agreement (USMCA) and regional EV subsidies are both tied to localized manufacturing.
BYD has likewise set aside the equivalent of $600 million USD to build a new factory in Brazil to better tackle South America.
“Overseas production is indispensable for an international brand,” said Zhou Zou, country manager of BYD Mexico. “Mexico is a key market with vast potential, Zou added, expressing eagerness for a plant in the country.”
From Nikkei:
The global electric vehicle market slowed last year, and former U.S. President Donald Trump, who is less than enthusiastic about the spread of EVs, could get re-elected in November.
But EVs and plug-in hybrids are growing in every market worldwide, Zou said, calling worries unfounded.
Overall, 1.36 million vehicles were sold in Mexico last year, up 24 [percent] from 2022. Of those, Chinese vehicles accounted for more than 120,000 , a gain of 60 [percent], business newspaper El Financiero reports.
SAIC Motor affiliate MG, along with Chery Automobile and JAC Group, are three Chinese brands that have a head start in Mexico.
Mexico is on the verge of becoming a key manufacturing hub for major EV makers. Tesla plans to build a gigafactory in Nuevo Leon, prompting Chinese suppliers to announce about $1 billion in parallel investments. CEO Elon Musk has indicated the new Mexican factory will be a mass production hub for low-cost EVs.
South Korea's Kia has said it will manufacture EVs in Mexico. Last year, BMW and Stellantis said they will manufacture EVs in Mexico.
Nikkei noted that BYD did extremely well in the fourth quarter of 2023, beating Tesla for the first time ever in terms of global EV sales volume. However, the Chinese firm’s sales are isolated primarily to the domestic market. One of the main reasons the Chinese automotive market has become so dominant is due to the size of the nation and the fact that living standards have improved over the last several decades. But the end goal is to become globally recognized brands akin to Volkswagen or Toyota.
In terms of sales, BYD doesn’t have the largest footprint in the Americas. While Mexico has purchased the company’s all-electric work vehicles and buses for a few years, BYD-branded vehicles didn’t start cropping up within the country until 2023. Brazil followed a similar trajectory, with BYD also having plans to sell buses to Columbia. Like everyone else, Chinese brands appear to be investing into Mexico in order to assure global relevance.
[Image: BYD Auto]
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A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Just to Clarify:
A new factory in Mexico or a factory in New Mexico?
I tend to TL;DR Mr. Posky.
Hmmm, a site full of capitalists? It seems a site full of protectionist socialists and our number one nationalist socialist is Posky.
I believe first we must distinguish between enemy and competitor. My view regarding the auto industry is the Chinese are competitors not the enemy.
BYD will be a force to reckon with in the future of the auto industry, it already is larger than Tesla. BYD apparently manufacture EVs cheaper and as good as (if not better) than Tesla. BYD sells vehicles in Australia and they are getting good reviews. BYD will become a global player.
Nationalism is like a sickness and can distort reality from truth. You are better being patriotic.
So, what about all the US and Western operations in China manufacturing? I mean our Teslas in Australia are Chinesium. Ah, but its okay? Hmm. It seems to me that many of our 'murican friends don't like competition.
Don't confuse the CCP with "China". China is full of capitalists under a communist regime and Japan is full of socialists under a capitalist regime. Some food for thought.