By Mexico Ev
BYD has canceled plans for a major electric vehicle plant in Mexico, citing U.S. tariffs and operational concerns, while continuing its international expansion in Brazil
BYD halts Mexico expansion over US tariff uncertaintyBYD, the world鈥檚 largest electric vehicle manufacturer, has canceled plans to build a significant factory in Mexico due to growing concerns over US trade policy. The automaker cited the potential impact of American tariffs on Mexico-made vehicles as a key factor.鈥淕eopolitical issues have a big impact on the automotive industry,鈥 said Stella Li, an executive vice president at BYD, in an interview with Bloomberg. 鈥淣ow everybody is rethinking their strategy in other countries. We want to wait for more clarity before making our decision.鈥滱lso read: Tesla Robotaxis go rogue? Elon Musk鈥檚 venture hits road bumps as BYD zooms pastWhile BYD confirmed it still intends to expand operations in North or South America, the company has not provided a timeline. In September, 2024, Bloomberg reported that the Chinese EV maker would delay any major investment decisions in Mexico until after the US presidential election. In March, 2024, Mexican President Claudia Sheinbaum stated that BYD had not yet submitted a formal investment proposal.Live EventsEV makers adjust global strategy in response to US tariffsAutomakers, including Nissan and Stellantis, have also begun scaling back production in Mexico due to the 25 per cent tariff imposed on vehicles imported into the US. This policy, implemented under President Trump鈥檚 second administration, continues to influence manufacturing decisions across the industry.Many automakers are exploring alternative approaches, from offering consumer discounts to offset future price increases to applying import fees on non-US-built vehicles.Despite the pause in Mexico, BYD is advancing with its first manufacturing facility outside of Asia, located in the Brazilian state of Bahia.Labor violations in Brazil prompt reassessment of BYD鈥檚 expansion modelIn December, 2024, Brazilian authorities halted construction at BYD鈥檚 Bahia site and filed suit against the company after more than 160 workers were rescued from what officials described as 鈥渟lavery-like鈥 conditions. A Brazilian labor authority reported that subcontracted workers faced degrading environments and had their passports and salaries withheld by a third-party service provider.Also read: Warren Buffett鈥檚 billion-dollar EV play backed BYD, so why not Tesla?BYD responded by relocating the affected workers to hotels and stated that it had performed a 鈥渄etailed review鈥 of subcontractor practices. The company also confirmed it had requested improvements 鈥渙n several occasions.鈥漇peaking Wednesday, July 2, Li said the incident influenced BYD鈥檚 global strategy: 鈥淲e should slow down, step back from the focus on speed. We need to work more with local companies,鈥 she said. 鈥淚t will take longer, but that’s OK.鈥滸lobal EV sales remain strong despite operational challengesBYD continues to challenge Tesla in key markets. The company recently outsold Tesla in Europe and is projected to sell over 5 million electric vehicles in 2025. Chinese EV firms, including BYD, Xiaomi, Nio, and Xpeng, are increasingly capturing market share through competitive pricing and advanced battery technology.Also read: BYD unleashes an EV industry reckoning that alarms BeijingAs of July, 2025, BYD stock is up 38 per cent year-to-date, driven by growing international demand and affordability.(You can now subscribe to our Economic Times WhatsApp channel)
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News onBYDMexico EV factoryUS tariffelectric vehicleautomotive industryBrazil labor violations(Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates….moreless
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