- Chinese authorities are concerned that Mexico would gain unrestricted access to BYD‘s advanced technology and know-how and may even possibly allow the US access to it, according to the Financial Times.
- Domestic automakers would need approval from China’s Ministry of Commerce to produce overseas, which it has yet to grant.
The Chinese government has delayed approval for BYD (HKG: 1211, OTCMKTS: BYDDY) to build a plant in Mexico amid concerns that smart car technology developed by the company could leak across the border to the US, the Financial Times said in a report today.
Domestic automakers need approval from China’s Ministry of Commerce to produce overseas, which the ministry has yet to grant, the report said, citing two people familiar with the matter.
Authorities are concerned that Mexico gain unrestricted access to BYD’s advanced technology and know-how, and may even possibly allowing the US access to it, they said.
“The commerce ministry’s biggest concern is Mexico’s proximity to the US,” one of the people familiar with the matter said, according to the Financial Times.
The Chinese government prioritizes projects in countries that are part of China’s Belt and Road Initiative infrastructure development program, according to the person familiar with the matter.
“Mexico’s new government has taken a hostile attitude towards Chinese companies, making the situation even more challenging for BYD,” said another person familiar with the matter, according to the Financial Times.
In February 2024, Zou Zhou, manager of BYD Mexico, said the company was considering setting up an electric vehicle (EV) plant in Mexico.
In a report last March, Bloomberg said BYD sent a delegation to the Mexican state of Jalisco to consider building an EV plant there.
The cost of building the Mexican plant could be about $600 million, similar to what BYD paid for its Brazilian EV plant, the Bloomberg report said, citing a person familiar with the matter.
In October 2024, Reuters cited Jorge Vallejo, a BYD Mexico executive, as saying BYD was expected to announce by the end of 2024 where its first plant in Mexico would be built.
The plant would produce 150,000 vehicles in the first phase and another 150,000 in the second phase, he said.
BYD sold more than 40,000 units in Mexico last year, according to the report in the Financial Times today.
The company hoped to double sales in 2025 and open 30 new dealerships in the country, the report noted.
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