Chinese EV maker BYD cancels its plans for a Mexico factory, citing ‘geopolitical issues’

The Chinese electrical conveyance (EV) shaper Build Your Dreams (BYD) announced connected Tuesday the cancellation of its program to physique a manufacturing works successful Mexico, pursuing months of uncertainty.

BYD cited a deficiency of clarity connected the United States President Donald Trump’s tariff plans for the automotive sector, arsenic good arsenic geopolitical tensions, for the determination to rethink its concern strategy.

BYD rolled retired its archetypal conveyance from its Brazilian works yesterday. It took the Chinese carmaker lone 15 months to physique the rider car mill arsenic portion of a BRL5.5 cardinal (USD1 billion) task successful Camacari, with yearly output expected to scope 150,000 NEVs portion creating… pic.twitter.com/TRSLQ3x3Dj

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BYD had announced in 2023 plans to make a plant successful Mexico, wherever it would nutrient astir 150,000 vehicles per twelvemonth and make 10,000 jobs.

The installation was expected to service the Mexican and Latin American markets, arsenic good arsenic yet the U.S.

The institution remains funny successful expanding successful the Americas but has nary timeline to marque a caller investment, BYD’s Executive Vice President Stella Li said successful an interrogation with Bloomberg connected Tuesday successful Brazil’s Bahia state, wherever the steadfast is opening its archetypal mill extracurricular of Asia. 

“Geopolitical issues person a large interaction connected the automotive industry,” Li said successful the interview. “Now, everybody is rethinking their strategy successful different countries. We privation to hold for much clarity earlier making our decision.” 

BYD was expected to denote the determination of its planned Mexico works by the extremity of 2024. However, successful March, President Claudia Sheinbaum said that BYD had not submitted a ceremonial connection to put successful Mexico.

At that time, the Financial Times (FT) reported that China’s Ministry of Commerce had not approved BYD’s concern successful Mexico for fears that the company’s astute car exertion could beryllium accessed by the United States. 

The FT reported that its 2 sources thought China was giving penchant to projects successful countries that are portion of China’s planetary infrastructure improvement strategy — the Belt and Road initiative. They besides cited “shifting geopolitical dynamics” for the deficiency of approval. 

In aboriginal November past year, BYD said it would travel done with plans to physique its archetypal works successful Mexico, nary substance the result of the U.S. election. That announcement initially made the concern look much apt to happen, but that anticipation was dashed with Tuesday’s announcement. 

With reports from El Economista, Bloomberg and The Financial Times