China‘s top electric vehicle maker, BYD, has decided to put its Mexico factory plans on hold until after the US election, according to a recent report from the South China Morning Post. This move comes as global businesses adopt a wait-and-see approach due to shifting American policies.

Uncertainty in the Air: The US Election Impact

BYD was actively scouting three locations for a car production facility in Mexico but has now paused these plans. The delay is largely due to the upcoming US election, with the company preferring to wait for the outcome of the race between former US president Donald Trump and vice-president Kamala Harris. This uncertainty has caused BYD to hit the brakes on its Mexico expansion.

BYD’s Official Statement: Focus on Mexico Market

In a statement to Bloomberg, BYD’s executive vice-president Stella Li said, “We continue working to build a factory with the highest technological standards for the Mexican market, not for the United States market, nor for the export market.” She emphasized that the Mexican market is very relevant for BYD.

Potential Locations and Previous Visits

One of the areas under consideration was around the city of Guadalajara, often referred to as Mexico’s Silicon Valley. BYD sent a delegation to the area in March. Additionally, Stella Li visited Mexico City in February for the launch of the automaker’s Dolphin Mini model, and senior management attended a box sponsored by BYD at the Formula E Mexico City E-Prix in January.

Tesla’s Similar Situation

BYD is not alone in this wait-and-see approach. Tesla also put its planned mega-factory in Mexico on pause in July, pending the US election outcome. Trump, who Tesla CEO Elon Musk has endorsed, has repeatedly threatened to impose tariffs on products made in Mexico. Tesla’s planned investment in Nuevo Leon was estimated at $10 billion over several phases.

Strategic Importance of Mexico

Mexico is seen as a strategically attractive location for foreign carmakers due to its proximity to the US and its participation in the North American free trade agreement. BYD, along with other big Chinese carmakers, is increasingly seeking to localize production to avoid punitive tariffs on imported electric cars and plug-in hybrid vehicles from China.

US Tariffs and Trade Concerns

The US already plans to impose tariffs of 100% on Chinese EVs, aiming to ensure the future of the auto industry is made in America by American workers. The Biden administration is also keeping a close eye on any attempts by Chinese companies to export cars from Mexico into the US and is considering ways to block such moves if they seek to circumvent tariffs targeting EVs made in China.

Future Plans and Meetings

Stella Li mentioned in a Bloomberg News interview in late August that she planned to meet with Mexico’s incoming president Claudia Sheinbaum, who takes office on October 1. She also confirmed that the company is still weighing three locations for a factory in Mexico.

EVXL’s Take: The Bigger Picture

The decision by BYD to pause its Mexico factory plans highlights the broader impact of political uncertainty on the EV industry. Despite these challenges, the strategic importance of Mexico as a production hub remains undeniable. As the EV market continues to grow, companies like BYD and Tesla are navigating complex trade policies to bring innovative and affordable electric vehicles to consumers. For more insights into the EV industry, check out our recent articles on Tesla and Lucid.

Photo courtesy of BYD