Chinese officials have reportedly delayed approval for BYD to construct a manufacturing plant in Mexico, according to a recent Financial Times report. The primary concern revolves around the potential for sensitive smart car technology developed by BYD to be accessed by the United States, given Mexico’s close proximity to the U.S.
Domestic automakers require authorization from China’s Ministry of Commerce for overseas production, which has not yet been granted to BYD. Sources familiar with the matter told the Financial Times that authorities worry Mexico could gain unrestricted access to BYD’s advanced technology and expertise, potentially allowing the U.S. access as well.
“The commerce ministry’s biggest concern is Mexico’s proximity to the US,” one source said, according to the Financial Times. China typically prioritizes projects in nations aligned with its Belt and Road Initiative. Another person familiar with the situation noted that the Mexican government’s recent stance towards Chinese companies has further complicated matters for BYD.
BYD’s plans for a Mexican plant have been in the works for some time. In February 2024, BYD Mexico’s manager, Zou Zhou, indicated the company was contemplating establishing an electric vehicle (EV) plant in Mexico. Bloomberg reported in March that BYD had sent a delegation to Jalisco, Mexico, to assess the feasibility of building an EV plant there. The cost of the plant could be approximately $600 million, similar to their investment in a Brazilian EV plant.
In October 2024, Reuters reported that BYD Mexico executive Jorge Vallejo said the company was expected to announce the location of its first Mexican plant by the end of 2024. The initial phase of the plant’s production was projected to reach 150,000 vehicles, with a subsequent phase adding another 150,000 vehicles. According to the Financial Times report, BYD sold over 40,000 units in Mexico last year and aimed to double sales in 2025 while expanding to 30 new dealerships.
