BYD's Mexico Factory Plans: US Election Outcome Could be Key

BYD's Mexico Factory Plans: US Election Outcome Could be KeyAccording to sources, BYD may not announce its investment plans for a large-scale factory in Mexico until after the US presidential election. Currently, global companies are in a wait-and-see mode due to uncertainties surrounding US policies

BYD's Mexico Factory Plans: US Election Outcome Could be Key

According to sources, BYD may not announce its investment plans for a large-scale factory in Mexico until after the US presidential election. Currently, global companies are in a wait-and-see mode due to uncertainties surrounding US policies.

BYD had previously inspected three potential factory sites in Mexico, but has suspended further site selection work. This pause is reportedly due to uncertainty about the outcome of the US election, as there are many unknowns regarding the potential outcomes for Donald Trump and Kamala Harris. However, BYD may still restart or adjust its factory plans, and no final decision has been made.

In response to speculation, BYD issued a statement saying that the company has not postponed its decision about building a factory in Mexico. It emphasized that the factory built in Mexico will primarily serve the Mexican market, not the US or export markets. This indicates that Mexico holds significant strategic importance for BYD.

Sources reveal that the area surrounding Guadalajara is one of the locations under consideration by BYD. In recent years, the region has developed into a technology hub in Mexico, earning the title of "Silicon Valley of Mexico." BYD sent a delegation to visit the region in March.

It's noteworthy that not only BYD, but also many other car manufacturers, such as Tesla, have announced investment plans in Mexico. However, Tesla's project to build a large factory in Nuevo Leon was temporarily put on hold in July due to the same uncertainty surrounding the US election outcome.

Republican candidate Trump has repeatedly threatened to impose tariffs on products manufactured in Mexico, and Tesla CEO Elon Musk has publicly expressed support for Trump. Tesla originally planned to invest $10 billion in phases to build a factory in Nuevo Leon.

Mexico is likely to become a crucial node in BYD's global production layout. Besides Mexico, BYD is building or operating factories in Brazil, Hungary, Turkey, and Thailand. Similar to other large Chinese auto manufacturers, BYD is accelerating localized production to avoid the high punitive tariffs that governments around the world impose on imported Asian electric vehicles.

While BYD clearly states that the Mexican factory will primarily serve the local market, the potential to export its reasonably priced electric cars to a large automotive market like the US is undeniably attractive. Mexico, with its geographical advantages and its participation in the North American Free Trade Agreement, has become a significant landing spot for foreign auto manufacturers.

Li Ke recently disclosed that she plans to meet with Mexico's new president, Claudia Sheinbaum, who will take office on October 1st, at some point. She also confirmed that the company is still considering three factory locations in Mexico.

The ultimate direction of BYD's Mexico factory plans will largely depend on the outcome of the US election. If Trump is elected, his trade policies could negatively impact BYD's plans. However, if the Democratic candidate wins, it could create more opportunities for BYD's investments in Mexico.

The progress of BYD's Mexico factory plans will be closely watched in the coming months.