In spite of the U.S. imposing tariffs on Chinese electric vehicles, an influx of vehicles from China entering Mexico’s market has caught the attention of officials in Washington, reports Wired.
Seeing success in the Mexican automotive market, BYD has begun considering plans to open auto plants in the Mexican states of Durango, Jalisco, and Nuevo León.
The move has prompted some attention from officials in Washington. Wired reported that, as Mexico becomes a bigger market for Chinese EVs, some fear it may be a "back door" to entering the U.S. market.
With both the U.S. and European Union enforcing higher tariffs on Chinese vehicles, many companies with factories in China have also looked to relocate their production as part of a practice referred to as nearshoring.
By opening plants in Mexico, BYD may be able to circumvent high tariffs through the US-Mexico-Canada Agreement, which allows for foreign automotive companies operating in Mexico or Canada to export its products to the U.S. essentially free of duties—so long as the materials were sourced locally.
Last year, there was a 50% increase in vehicles imported to Mexico from China from 2022, making up 20% of light vehicles sold in Mexico.
Between 2022 and 2023, Mexico rose from fourth to third place among the largest automotive exporters in the world; predominantly because of a 14.33% growth in auto exports during that time.
