China is delaying approval for BYD (HKG: 1211, OTCMKTS: BYDDY) and Geely to produce cars in Latin America as US tariffs fueled trade and economic uncertainties, Reuters said in a report today, citing two people with knowledge of the matter.
In February 2024, a BYD Mexico executive said the company was considering setting up an electric vehicle (EV) plant in Mexico.
In February this year, Geely announced that it had signed an agreement with Renault to collaborate on the production of low-emission vehicles in Brazil.
Both projects have taken longer than expected to get approval from the Chinese government, Reuters said, citing people familiar with the matter.
Chinese state planners told representatives of the automakers that the projects would risk technology transfer, but did not elaborate, according to the report.
Officials from China’s auto industry association s also warned in separate conversations with the automakers that US President Donald Trump’s tariffs would create uncertainty in global trade and the economy, and complicate the risks and returns of their investments, the people said.
Authorities have become stricter and more cautious about overseas investments by Chinese automakers, but not to the point where they would completely stop accepting applications, a third source said, according to Reuters.
The review timetable has been extended and they will ask companies to submit more materials, the source added, according to the report.
Geely said its cooperation with Renault in Brazil had been successful, with no delays or extra scrutiny, noting that its EVs had launched locally this week, just 52 days after the agreement was signed, according to the report which cited a statement from the company.
BYD was expected to announce by the end of 2024 where its first plant in Mexico would be built, Reuters cited BYD Mexico executive Jorge Vallejo as saying in a October 2024 report.
The plant would produce 150,000 vehicles in the first phase and another 150,000 in the second phase, Vallejo said at the time.
In a March 19 story, the Financial Times said the Chinese government had delayed approval for BYD to build the plant in Mexico because of concerns that smart car technologies developed by the company could leak across the border into the US.
For Geely, it announced on February 18 that Geely Holding would invest in Renault Brazil as a minority shareholder to gain access to localized production, sales and service resources in Brazil.
Geely launched the Geely EX5 in the Brazilian market on Wednesday and said the model would be sold from July, initially in 18 cities with 23 dealerships, the Reuters report today noted.
Geely launched the all-electric SUV (sport utility vehicle) in Australia and New Zealand a month ago, marking the expansion of its international footprint to Oceania.
BYD Xi’an, BYD’s sixth car carrier, was officially launched on April 2. BYD Shenzhen, which can carry 9,200 cars, will soon make its maiden voyage.
