Top Chinese carmaker BYD has begun a feasibility study on whether to set up a production facility in Mexico to export electric vehicles into the United States.
The automaker is due to open a factory in Thailand later this year and also looking at plants in Hungary and Brazil.
Late last year the Wall Street Journal revealed that US lawmakers had discussions in November on whether to hike tariffs on Chinese cars and consider other ways to stop Chinese firms from exporting vehicles and other products to the US from Mexico.
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Nikkei Asia has now said that BYD is in talks about building a plant in Mexico to export cars to the US, saying this was confirmed on Wednesday by the company’s head in Mexico.
BYD, known for its cheaper models and a more varied lineup, recently overtook Tesla, its biggest rival, to become the world’s top EV maker in terms of sales.
According to the Nikkei report, BYD is negotiating with officials over terms, including the factory’s location.
BYD’s sales are currently concentrated in China, but it is clearly has ambition to expand globally and set up plants in many regions.
EVs are reportedly popular in Mexico and the country has a massive automaking sector, with many of the industry’s top global players. It is also tightly integrated with the US car sector.
“Overseas production is indispensable for an international brand”, BYD Mexico country manager Zhou Zou told Nikkei.
The carmaker’s Mexico office declined to comment to Reuters.
They will ‘demolish’ us without trade barriers: Musk
Major US automakers have warned that Chinese cars could spell doom for their own prospects, among them Elon Musk’s Tesla.
Last month, Tesla’s chief executive predicted that Chinese automakers will “demolish” global rivals without trade barriers.
Musk’s view is echoed by a leading advocacy group.
“The introduction of cheap Chinese autos – which are so inexpensive because they are backed with the power and funding of the Chinese government – to the American market could end up being an extinction-level event for the US auto sector,” according to a forthcoming report by the group Alliance for American Manufacturing.
In Latin America, BYD plans to spend 3 billion reais ($620 million) on a new industrial complex in northeastern Brazil.
The three-plant complex will be built in northeastern Bahia state, on land formerly occupied by a Ford plant that closed in 2021.
- Reuters with additional input and editing by Jim Pollard
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