BYD Seeking Location in Mexico for Establishing a Factory

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BYD, a Chinese electric vehicle manufacturer, is looking for a location in Mexico to build a factory to increase its share of the local market, BYD Americas CEO Stella Li told Reuters on Wednesday. By the end of the year, the company expects to have chosen a location for the plant, which will have a production capacity of 150,000 cars per year, according to Li.

BYD outpaced former market leader Tesla in EV sales globally in the fourth quarter of 2023, and auto industry officials say its expansion into Mexico presages a competitive threat that the Shenzhen-based automaker and others from China may pose to companies already operating in the United States.

The Alliance for American Manufacturing, a manufacturing advocacy group in the United States, warned this month that low-cost Chinese cars and parts could threaten the viability of American automakers. The group urged Washington to halt the import of low-cost Chinese automobiles and parts from Mexico in order to avoid a "extinction-level event" for the US auto industry.

Li stated that BYD's Mexico ambitions are solely focused on local sales, and that the company is looking for factory sites in central and southern Mexico rather than northern Mexico near the US border, where she believes transportation costs to reach consumers would be high.

"Our plan is to build the facility for the Mexican market, not for the export market," she said.

When asked if Mexican officials had mentioned the United States' concerns about Chinese automakers, Li said they had been open to BYD's plans.

According to analysts, Chinese automakers have been rapidly improving their vehicles, outpacing global rivals in some areas such as infotainment systems and autonomous driving.