Gearing up for electric mobility? BYD, China’s largest EV auto maker, which recently surpassed Tesla as the world’s biggest seller of electric vehicles, recently sent representatives to Jalisco. They met with state officials and existing Chinese suppliers in the area, like Haitian (an auto parts machinery maker), to explore the possibility of building a new electric vehicle factory there. Interestingly, BYD reportedly conducted a thorough analysis of educational resources and population density around potential plant locations.
BYD’s Mexican EV plans have shifted gears. Initially eyeing the US market with a factory, they’re now prioritizing the Mexican market itself. Their CEO, Stella Li, recently confirmed a 150,000 vehicle capacity plant with a target selection by year-end. This comes after earlier reports of exploring Jalisco for the factory location.
BYD’s Mexican EV factory is prioritizing central and southern locations to serve the domestic market, not as a US export hub. CEO Stella Li confirmed this recently. This is a strategic shift from their initial plan. Their recent launch of the affordable Dolphin Mini in Mexico underscores their commitment to the local market.
BYD’s affordable electric vehicles are a hit in Europe and Southeast Asia, thanks in part to their competitive pricing. However, a hefty 27.5% tariff makes selling them in the US challenging. A potential solution? Building a factory in Mexico. This would significantly reduce import tariffs (to 2.5% or potentially even zero) for vehicles sold in the US, thanks to trade agreements.
Building a Mexican plant could cost about $600 million, which is similar to what BYD paid for its Brazilian EV plant, Bloomberg said, citing a person familiar with the matter.
Written by Mexpat Realtors – August 2024
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