BYD’s expansion into Mexico paused amid fears of U.S. access to EV technology

BYD’s plans to build an electric vehicle manufacturing plant in Mexico have been delayed following intervention by China’s Ministry of Commerce. The ministry has withheld necessary approval over concerns that the automaker’s proprietary technology could become accessible to U.S. competitors due to Mexico’s geographical proximity to the United States.

The proposed plant, which BYD has been planning since 2023, is part of a broader international expansion strategy that includes existing facilities in Brazil, Hungary, and Indonesia. BYD has already begun selling vehicles in Mexico, such as the Yuan Plus crossover.

According to reporting by the Financial Times, Chinese authorities fear that technology used at the Mexico facility could be reverse engineered or otherwise transferred to American companies, either directly or with the assistance of Mexican entities. The ministry’s concerns reflect the broader geopolitical and trade tensions between China and the U.S., including proposed tariffs and scrutiny of Chinese imports under the current U.S. administration.

China’s apprehension is also influenced by recent moves by Mexico’s government. According to sources, Mexico has adopted a more adversarial stance toward Chinese companies, including the imposition of tariffs on Chinese textiles. The government’s position may further complicate efforts by BYD and other Chinese automakers to establish a manufacturing footprint in the country.

The Trump administration has previously expressed concern that Mexico could serve as a conduit for Chinese goods to enter the U.S. market under favorable trade terms. These concerns have contributed to an increasingly restrictive trade environment for automakers operating across North America.

Other Chinese EV manufacturers, including Zeekr and Neta (a sub-brand of Hozon Auto), have also initiated efforts to expand into Mexico through regional partnerships. However, plans for local production may face similar delays as Chinese officials evaluate the potential risks of exposing proprietary EV technologies outside their domestic market.

BYD executive vice president Stella Li acknowledged the uncertainty surrounding the project, stating that the company is continuing to evaluate its options while monitoring evolving trade conditions and regional supply chain challenges.