As BYD continues its dominant global expansion, the EV maker’s latest target is a stone’s throw from the US. BYD is looking to establish an EV plant in Mexico as an “export hub” for the US.
After slipping past Tesla in EV sales in the last three months of the year, BYD became the top-selling EV maker globally.
BYD is now among the top ten global automakers for the first time. After dominating its home market of China, the company is expanding overseas. The automaker’s exports surged last year, with 242,765 units delivered across 70 countries.
With low-cost, functional electric cars like the Dolphin, Atto 3, and Seal, BYD is gaining market share in key overseas markets.
It’s already a leader in Japan, Thailand, Brazil, and others. The company has also recently launched new models in Mexico, Australia, India, and Europe.
As BYD looks to expand its brand globally, it is opening new overseas plants and ramping up exports.
BYD began construction on its plant in Thailand last March after delivering its 10,000th Atto 3 in the country. The plant will begin building EVs and hybrids this year. Once fully running, it will have about 150,000 units of annual output capacity for Thailand and exports.
In Latin America, BYD is investing $605 million (3 billion reals) to build a facility in Brazil. Now, it looks like BYD is pushing for an EV plant in Mexico as it inches closer to the US.
BYD is considering building an EV plant in Mexico
The head of BYD Mexico, Zhou Zou, told Nikkei that BYD is considering building a plant in the country.
Overseas production is critical, and Mexico is a crucial market with significant potential, according to Zou. The move comes as BYD looks to build an export hub to the US and overseas markets.
Zou didn’t mention where BYD is looking to build, but Nuevo Leon and the Bajio region are likely candidates.
One of the biggest draws for BYD is lowering export costs into the US. The US-Mexico-Canada Agreement requires at least 75% of vehicle parts to be made in one of the three regions to receive potential tariff benefits.
The US also passed the Inflation Reduction Act, which requires EVs to be assembled in the US with strict battery sourcing requirements to gain a potential $7,500 tax credit.
Starting this year, EVs must be free of battery components manufactured by a “foreign entity of concern,” including China.
Mexico is becoming a hot spot for EV manufacturing. Kia announced plans to build EVs in Nuevo Leon. BMW and Stellantis also confirmed plans to produce EVs in the country last year.
Tesla is planning to build a gigafactory in Nuevo Leon. The Nuevo Leon secretary of economy, Iván Rivas, said Tesla had all the permits to begin construction in December.
Incentives, like water and roads around the factory site (in addition to a payroll tax reduction), are valued at around 2,627 million pesos (~$153 million).
Mexico is drawing significant manufacturing interest with 170 nearshoring investments totaling $74 billion.
city-dwellers’s Take
BYD is releasing new models while expanding overseas at a record pace. The automaker continues gaining market share in key regions.
For example, after launching in Japan just last year, BYD already accounts for 20% of the country’s EV imports. And Japan is not known for importing vehicles. Domestic automakers like Toyota dominate sales, while imports are typically luxury like BMW, Audi, and Mercedes-Benz.
BYD is expected to enter South Korea within the first half of the year to take on Hyundai and Kia on their home turf.
Earlier today, city-dwellers posted about how BYD was launching its cheapest EV in South America. The BYD Dolphin Mini (Seagull in China) will start at $20,100 (99,800 reals) in Brazil.
With EVs in new segments like luxury (check out the Yangwang U7 electric sports car), mid-size SUVs (the Song L and Sea Lion 07), and entry-level (Dolphin Mini/ Seagull), BYD looks to build on its momentum in 2024.
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