The Chinese car manufacturer BYD (Build Your Dreams) is scouting electric car factories in Mexicoand the move is set to rattle the likes of Tesla in the EV market as BYD further cements itself in the industry. The options are down to three states; however, some sources say plans have been put on hold to assess the US political climate.
BYD looks to Mexico for its next EV facility
The main reason BYD wants to establish itself in Mexico is numerous advantages that the states are offering in hopes of attracting development to the area, according to Jorge Vallejo, general manager of BYD Mexico. Some of these are tax and preferential price incentives and land offers. Vallejo said:
“A plant is not just about having the space, but the logistics, all the development, the urban infrastructure that is generated, water, gas, everything that is needed for a car plant. There are many elements, also logistical, which we analyze together with them.”
Mexico’s federal government does not appear to be welcoming Chinese electric car makers with open arms by not offering incentives such as tax breaks or rebates on public land, apparently under pressure from the United States. However, three Mexican states have decided to bet on the plant makes BYD attractive offers. The states have not been officially named, but a top BYD official stated that the facility would definitely be centrally located.
Another source revealed that the Guadalajara region is being seen as an attractive location option after a BYD delegation was seen scouting around the city. The region is referred to as Mexico’s Silicon Valley, so it seems the source is correct that it is a possibility.
BYD also has factories in Thailand, Turkey, Brazil and Hungary.
It is not yet detailed which electric models BYD aims to produce at the Mexican plant, but the plan is to deliver 150 units per year. step over two steps, and ultimately reach a production of between 400,000 to 500,000 per year.
Vallejo made it clear that BYD is not interested in the US market and is clean focused on local sales in Mexico.
How is BYD positioned in the Mexican electricity market?
The state of Nuevo Leon is known as an auto manufacturing center and is the site of a proposed Tesla mega-factory and a Volvo plant, according to the governor of the state. The state of Mexico is home to the Franco-Italian company Stellantis’ new facility, which is already in production.
San Luis Potosi has a BMW plant, and the state of Puebla in the central region has been home to a Volkswagen plant for many years. That wave of automotive investment in Mexico has seen both Chinese and Western automakers cement themselves in the South American sphere. However, Tesla put the building on hold of its $110 billion mega-factory in the wake of Donald Trump vowing to hit Mexican products with increased tariffs. The US presidential race between US Vice President Kamala Harris and former President Trump will have implications for the vehicle market, although BYD says it is only looking at the Mexican market, so the situation will be clearer after the November 2024 election.
BYD rejects rumors that the new facility is on hiatus
Build Your Dreams addressed reports that it was halting its factory plans to assess the US political situation after the election. Head of BYD Americas Stella Li said BYD had not postponed any decision about a plant in Mexico, and the country remains a “relevant” market.
However, the rumors continue. Trump’s threats regarding impose tariffs on Mexican products seems to have struck a nerve, and while BYD won’t appear as if it’s losing confidence, it’s still expected that the company will monitor the situation before proceeding with its plans.