BYD will build a factory in Mexico that could be the brand’s gateway to the United States.
The Chinese brand BYD is carving out a niche for itself in the electric car market in Europe, but it intends to grow globally and integrate into other countries. The goal is to become the largest electric vehicle manufacturer in the world, and Mexico can play an important role in that.
Zhou Zou, national manager of BYD Mexico, has assured that the brand intends to compete with Tesla and other electric manufacturing giants, so the diversification of its factories will be the key to its success. BYD believes that Mexico may have great potential to integrate into the American market and is already studying where to locate its next factory.
Zou has confirmed to Nikkei Asia that they are studying the feasibility of designing an assembly plant in Mexico. The brand has started talks with local and national governments, so it doesn’t seem too far away. The location is still unknown, but it is rumored that they could consider the state of Nuevo León in the north, the Bajío region in the center or the Yucatán Peninsula in the south.
It is still unknown when the Mexico factory could be operational, but it is clear that BYD will not take long to build it. The brand is expanding globally and is expected to open a new facility in Thailand later this year. This is in addition to the investment of 605 million dollars to build a center in Brazil and the plan to build another in Hungary in three years.
Mexico could be BYD’s gateway to the United States
BYD’s growth plans include settling first in Europe, but they dream of expanding to the United States. In this market they would have large competitors that are also planning to build electric vehicle factories on the continent, such as Kia, BMW, Stellantis and Tesla.
Mexico is not BYD’s target market, but it can be the gateway to the United States. Tax credits and labor costs are more affordable in Mexico compared to those in the United States. This factory will considerably reduce export and transportation costs from its headquarters in Guangdong, China.
BYD
This new strategic decision comes at a time when global sales of the brand’s electric cars have stabilized, even falling at some points last year. The explanation is simple: other classic brands with combustion engines have increased investment in electric vehicles and plug-in hybrids.
Mexico will be the test market for BYD before making the final decision to expand to the United States. Sales of new cars have increased by 24% in the country in 2023, CarScoops reports. This represents 1.36 million vehicles sold in Mexico last year, of which more than 120,000 were Chinese-made.