The Chinese government has delayed approval for BYD to establish an electric vehicle (EV) plant in Mexico, citing concerns over potential technology leaks to the United States, the Financial Times reported on Friday.
Chinese automakers require authorization from the Ministry of Commerce to manufacture vehicles overseas, but BYD has yet to receive clearance, two sources familiar with the matter told the publication. Authorities are reportedly concerned that BYD’s advanced smart car technology could become accessible to Mexico and, by extension, the U.S.
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“The commerce ministry’s biggest concern is Mexico’s proximity to the U.S.,” one source said, according to the Financial Times. Another person noted that China favors overseas projects in Belt and Road Initiative countries, while Mexico’s new government has adopted a “hostile attitude” towards Chinese companies, complicating matters for BYD.
BYD has been exploring plans for a Mexican factory since early 2024. The company sent a delegation to Jalisco in March last year and has been weighing a $600 million investment, according to a Bloomberg report. In October, Reuters cited BYD Mexico executive Jorge Vallejo as saying an announcement on the plant’s location was expected by the end of 2024, with an initial production capacity of 150,000 vehicles, eventually doubling to 300,000.
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BYD sold over 40,000 vehicles in Mexico in 2024 and aims to double that figure this year, the Financial Times reported. The automaker also plans to open 30 new dealerships in the country.