Chinese company BYD has indefinitely postponed the construction of a plant in Mexico amid a crucial geopolitical in the automotive industry.
This project involves a planned investment of $2 billion.
BYD is the fastest-growing original equipment manufacturer in China in recent years. The company is advancing rapidly thanks to a high level of vertical integration. In addition, it maintains a large proportion of internally sourced products and systems, which strengthens its operational control and improves its efficiency.
Geopolitics in the automotive industry
BYD maintains a dominant market share in new-generation electric vehicles. Its leadership is particularly clear in models priced below RMB 200,000 ($27,400). Thus, the company is consolidating its presence in the highest-volume segments.
In addition, data from the China Association of Automobile Manufacturers shows a notable jump in exports. China shipped 58.59 million vehicles abroad in 2024, a year-on-year increase of 19.3%. With this, the country reaffirms its position as the world’s largest exporter of automobiles.
At the same time, Chinese cars are gaining ground in international markets. Their expansion is driving the growth of the global automotive sector. The performance of new energy vehicles is also noteworthy, with exports reaching 1.284 billion units in 2024, an increase of 6.7%. This pace provides a key boost to sustainable mobility.
Finally, BYD’s dominance is clear in Latin America. In Brazil, its electric vehicles account for over 80% of domestic market sales. This positions the company as a key player in the region’s energy transition.
BYD investment
In 2023, BYD announced its plan to build an automotive plant in Mexico. The initial investment would be $1 billion and would allow for the production of 150,000 electric cars per year, in addition to generating more than 10,000 jobs. However, between 2024 and 2025, the project first entered into uncertainty and then into a pause.
According to the Financial Times, the Beijing government delayed authorization for BYD to invest in Mexico. The argument was clear: the company’s technology could leak to the United States due to its geographical proximity. In China, automakers must obtain official approval to invest abroad, and BYD had not achieved this until early 2025.
An analysis by Mexico’s Chamber of Deputies offered a broader interpretation. The decision is part of the technological war between China and the United States. Beijing fears that if BYD sets up a factory in Mexico, its innovations in electric vehicles could be accessed or copied from US territory. In addition, the analysis pointed out that the measure could also have been influenced by other factors. For example, China may have halted the project in anticipation that the United States would seek to pressure Mexico to apply stricter controls on Chinese imports.
The BYD case took an additional turn. Liverpool, the department store chain, decided to suspend sales of the vehicles. Thus, BYD was left without a distributor in Mexico, despite having built a significant network of sales and service outlets.