China’s BYD plans to build new EV plant in Mexico

China’s top electric vehicle manufacturer, BYD, is considering to establish a plant in Mexico to serve as an export hub to the U.S., Nikkei reported on Wednesday, citing the head of the company’s local subsidiary.

The company is currently in negotiations with national and local government officials to determine the location and terms for the potential plant.

Overseas production is crucial for an international brand, and Mexico is seen as a key market with significant potential, Zou added.

The move comes as BYD seeks to expand its global presence and capitalise on the lower export costs into the U.S. offered by the U.S.-Mexico-Canada Agreement.

Zou told the Japanese newspaper that Nuevo Leon in northern Mexico and the Yucatan Peninsula are among the leading candidates for a factory location in that country.

The Mexican market is also attracting other major EV manufacturers, including Tesla, Kia, BMW, and Stellantis, as well as Chinese brands such as SAIC Motor affiliate MG, Chery Automobile, and JAC Group.

Mexico is poised to become a major manufacturing hub for electric vehicle (EV) makers. Tesla’s plan to build a gigafactory in Nuevo Leon has prompted Chinese suppliers to announce approximately $1 billion in parallel investments.