Trade Tensions Derail BYD’s Mexico EV Plant Plan

BYD

Sheinbaum confirms no formal investment; U.S. tariffs undermine Chinese automakers’ North American strategy

BYD Faces Setback Amid Growing US-Mexico Trade Pressure

BYD’s plan to build a major EV manufacturing plant in Mexico appears to be falling apart due to escalating trade tensions. Mexico’s President Claudia Sheinbaum confirmed this week that BYD never made a formal investment commitment. This comes amid U.S. concerns that Chinese automakers are using Mexico to circumvent 100% tariffs on Chinese-made cars.

Sheinbaum emphasized that Mexico's trade priorities lie firmly within the USMCA framework and its alliance with the U.S. and Canada. “As we've said, you can invest in Mexico, but we take our trade commitments into consideration,” she said.

BYD’s Mexican Market Claim Met With Skepticism

In 2023, BYD expressed interest in building a plant to produce 150,000 cars annually and generate 10,000 jobs. As recently as mid-2024, it planned to announce a location by the end of the year. However, trade analysts had long cast doubt on the project’s viability, citing the U.S. tariff wall.

BYD executives insisted the plant would serve Mexico’s domestic market, not the U.S.

Still, industry experts like Herrera noted the project had little chance of bypassing U.S. protectionist measures. The situation reflects how geopolitics increasingly affects EV supply chain strategies across North America.

The Metalnomist Commentary

BYD’s withdrawal from Mexico marks a growing friction point between China’s EV ambitions and America’s industrial policy. For Mexico, balancing between Chinese investment and USMCA loyalty will define its strategic value in the clean-tech era.

As the global EV race intensifies, regulatory alignment and tariff policy may matter just as much as technology and capital.