BYD will follow in Tesla’s footsteps and build its next electric vehicle plant in Mexico.

BYD plans to build its first plant in Mexico in order to export its electric vehicles to the USA. A Chinese company is conducting a feasibility study for the construction of a plant in Mexico. This will strengthen its presence in the country and would open the door to competition with Tesla in North America.

According to a report from NikkeiBYD is evaluating several options for building a plant in Mexico. Company negotiates with the federal government and local authorities determine the location of the plant. Candidates include Nuevo Leon, the state where the Tesla Gigafactory will be built, as well as the Bajio region.

“Overseas production is important for an international brand. “Mexico is a key market with enormous potential,” said Zhou Zou, president of BYD Mexico. Other states in the southeast and the Yucatan Peninsula are also vying for space. The Mexican government has promoted the development of projects in this area to overcome the water crisis that has arisen in Nuevo Leon so that they can have an advantage.

The construction of BYD’s plant in Mexico is part of aggressive strategy of positioning itself in the country and expanding into Latin America. The company began operations in March 2023 with the expectation of placing 50,000 vehicles in 2024. The manufacturer currently has 11 distribution groups in the country and has signed an alliance with the Liverpool chain to sell some of its models.

BYD also has a plant in northern Brazil.the result of an investment of R$3,000 million (€563 million) made in the complex formerly occupied by Ford.

BYD supports Tesla in Mexico and the US

First signs construction of a plant in Mexico They occurred in September 2023. Stella Lee, global vice president of BYD, admitted that they are considering the idea of ​​manufacturing their cars in the country. In an interview with ExtensionThe executive said the activity would serve to meet local demand and allow expansion into other Latin American countries.

Another benefit that BYD receives from assembling its vehicles in Mexico is low cost of export to the USA. The Mexico-United States-Canada (T-MEC) Free Trade Agreement has strengthened Mexico’s position as a leading automotive supplier to its northern neighbor. According to the US Department of Commerce, Imports from Mexico up 37.7% in 2022which is equivalent to $149.946 million.

To avoid the tariffs, manufacturers will have to make key parts and source at least 70% of their steel and aluminum locally. The benefits of T-MEC have encouraged companies such as Tesla or BMW to invest in Mexico.. The first confirmed the presence of a Gigafactory in Monterrey in early 2023, although months later there were rumors of a possible cancellation.

In its turn, BMW invested 800 million euros build a plant in San Luis Potosí to produce batteries. Milan Nedeljkovic, a member of the BMW board of directors, said the site will be key to the production of the Neue Klasse electric car, which will appear in 2027.

BYD did not provide further information about its new plant. In December, he mentioned that he was analyzing options, but did not confirm that he would build the plant. The Chinese company denied Samuel Garcia, the governor of Nuevo Leon, who posted on his social networks that BYD would set up shop in his city.