China’s leading electric vehicle manufacturer, BYD Co., Ltd., has reportedly put its planned investment in Mexico on hold until after the US election. The decision comes amid concerns about potential changes to trade policies under the new administration, prompting a wait-and-see approach from global businesses.
BYD had been exploring three locations for a car production facility in Mexico but has temporarily halted its search. The company’s delay is primarily attributed to the uncertainty surrounding the outcome of the US election, as BYD seeks to assess the potential impact on its investment strategy.
One of the sites under consideration was near the city of Guadalajara, a tech hub often referred to as Mexico’s Silicon Valley. BYD sent a team to the area for a site visit in March. In February, Stella Li, BYD’s executive vice president, attended the launch of the automaker’s Dolphin Mini model in Mexico City, while senior management hosted an event at a BYD-sponsored box during the Formula E Mexico City E-Prix in January.
Mexico has experienced a significant influx of investment announcements from both Chinese and Western auto manufacturers, including Tesla Inc. However, Tesla’s planned mega-factory in Mexico was put on hold in July due to uncertainties surrounding the US election.
Republican nominee Donald Trump, who has been endorsed by Tesla CEO Elon Musk, has previously threatened tariffs on products made in Mexico. Tesla had proposed building its plant in the northern state of Nuevo Leon, with an estimated $10 billion investment over multiple phases.
The Biden administration is closely monitoring any efforts by Chinese companies to export cars from Mexico to the US and is exploring measures to block such moves if they attempt to circumvent tariffs on EVs made in China, according to US Trade Representative Katherine Tai in a May interview.
While BYD’s factory plans are currently on hold, they could be revived or adjusted in the future. No final decision has been made regarding the company’s investment in Mexico.
