China's government blocks BYD plant in Mexico – Concern about technology transfer to the USA

3/20/2025, 3:11 AM

Beijing blocks BYD's planned plant in Mexico due to fears of technology transfer to the USA – geopolitical tensions exacerbate uncertainties.

Eulerpool News Mar 20, 2025, 3:11 AM

Beijing delays approval for BYD to set up a production facility in Mexico. China's largest electric car manufacturer announced the plant in 2023, but the government fears that advanced smart car technology could cross the border into the USA.

The planned plant, which was to create 10,000 jobs and produce 150,000 vehicles annually, requires approval from the Chinese Ministry of Commerce. This is still pending, according to people familiar with the matter. The key factor is Mexico's proximity to the USA, it is said.

At the same time, Beijing prioritizes investments in countries that are part of the Belt and Road Initiative, and holds back on projects in North America. In addition, Mexico's government has recently shown skepticism towards Chinese investments, especially after Donald Trump's reelection. His administration is pushing to prevent Chinese goods from having tariff-free access to the US market through the North American trade agreement (USMCA).

Mexico's President Claudia Sheinbaum emphasized in November that there are no "concrete" investment plans by Chinese companies in Mexico. Additionally, the country has introduced tariffs on Chinese textiles due to US pressure and initiated investigations into steel and aluminum imports from China.

Despite these political uncertainties, BYD remains active in Mexico: In 2024, the company sold more than 40,000 vehicles and plans to double sales figures in 2025. BYD Vice President Stella Li recently stated that the company is still reviewing its strategy and has not yet made a final decision about the plant.

In addition to the Mexico expansion, BYD plans a stronger international presence. Recently, the company raised 5.6 billion US dollars through a share placement in Hong Kong. At the same time, global expansion is stalling: A planned 1 billion dollar site in Brazil was temporarily stopped in December after authorities found "slave-like" working conditions. BYD responded by dismissing a Chinese subcontractor.

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