Chinese authorities are delaying approvals for BYD and Geely to proceed with vehicle manufacturing plans in Latin America due to rising concerns over global trade tensions and potential technology transfer, two people familiar with the matter told Reuters.
The projects, which include BYD’s potential electric vehicle (EV) plant in Mexico and Geely’s collaboration with Renault to produce low-emission vehicles in Brazil, have encountered slower-than-expected progress in regulatory reviews, the sources said.
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Chinese state planners reportedly warned automakers that such overseas investments could carry risks of technology leakage, particularly amid geopolitical instability. “US President Donald Trump’s tariffs would create uncertainty in global trade and the economy, and complicate the risks and returns of their investments,” said one person briefed on the matter, Reuters reported.
A third source told Reuters that Chinese authorities have become more stringent in their review of outbound investments in the auto sector, although applications are still being accepted. “The review timetable has been extended and they will ask companies to submit more materials,” the source added.
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Despite regulatory headwinds, Geely said its partnership with Renault in Brazil had not faced any delays. “Our cooperation in Brazil has been successful, with no delays or extra scrutiny,” Geely said in a statement to Reuters, adding that its EVs were launched locally just 52 days after the deal was signed.
BYD, meanwhile, was expected to announce the location of its first plant in Mexico by the end of 2024, according to BYD Mexico executive Jorge Vallejo. “The plant would produce 150,000 vehicles in the first phase and another 150,000 in the second phase,” Vallejo said in an October 2024 interview cited by Reuters.
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In a separate Financial Times report published in March, it was suggested that Chinese regulators had held off on approving BYD’s Mexico plant due to concerns that smart car technologies could potentially be transferred across the border into the United States.
Geely officially launched its EX5 all-electric SUV in Brazil on Wednesday, saying sales will begin in July across 18 cities through 23 dealerships. The company also debuted the model in Australia and New Zealand last month, expanding its global reach into Oceania, Reuters noted.