Tesla competitor BYD axes Mexico factory plans

Business Insider

2 days ago

The world's largest electric vehicle maker is halting plans to build a major factory in Mexico due to concerns about US trade policies.
On Wednesday, BYD said that the company still plans to expand further into North or South America, but it does not have a timeline for the plan.
"Geopolitical issues have a big impact on the automotive industry," Stella Li, an executive vice president, said in an interview with Bloomberg. "Now everybody is rethinking their strategy in other countries. We want to wait for more clarity before making our decision."
In September, Bloomberg reported that the EV giant would not announce a major plant investment in Mexico until after the US election. In March, Mexican President Claudia Sheinbaum said BYD had not made a formal offer to invest in the country.
President Donald Trump's tariffs have been a big pain point for US and global automakers. Cars coming from Mexico to the US remain subject to a 25% tariff.
Car manufacturers have responded in various ways, from offering discounts to shoppers who hope to avoid future price hikes to adding import fees on vehicles built outside the US. Some producers, like Stellantis and Nissan, have cut back on Mexico-based production.
In the region, BYD is opening a plant in the Brazilian state of Bahia, the company's first factory outside Asia.
In December, Brazilian authorities halted the construction of BYD factory and sued the company, saying that construction workers lived in slavery-like conditions. Over 160 workers had been rescued from the working conditions, according to a statement from a Brazilian labour authority.
The statement said that workers were put in "degrading" conditions and had their passports and salaries withheld by a service provider for BYD.
At the time, BYD said affected workers had been moved to hotels. It added that it had conducted a "detailed review" of the working and living conditions for subcontracted employees and asked on "several occasions" for the construction firm to make improvements.
On Wednesday, Li said the episode prompted the company to reassess its approach to international expansion.
"We should slow down, step back from the focus on speed. We need to work more with local companies," she said. "It will take longer, but that's OK."
Chinese players, including BYD, Xiaomi, Nio, and Xpeng, have been undercutting Tesla's prices and gaining market share in China and Europe. BYD is on track to sell more than 5 million cars this year, and the company sold more EVs than Tesla in Europe for the first time in April.
BYD stock is up 38% so far this year because of strong battery technology, its affordability, and global expansion.