Chinese Automaker’s Mexico Factory Plans Derailed By US Politics

Plans for global growth rarely follow a straight line, especially when politics and international trade come into play. For BYD, one of the world’s fastest-rising automakers, a much-anticipated expansion into Mexico has been put on hold.

The reason? A mix of shifting geopolitical winds and concerns over U.S. trade policy, particularly in light of Donald Trump’s return to the White House. Still, the company isn’t slowing down entirely, and has just opened its first factory outside of Asia, located in Brazil.

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As we reported last year, had been scoping out three locations in Mexico for a new factory. However, it paused its search in September to wait to see the outcome of the 2024 US presidential election, likely anticipating that a victory for Trump would likely shake up the status quo of international trade. That’s exactly what the 45th and 47th President has done.

While recently speaking at the opening of BYD’s new factory in Brazil, executive vice president Stella La said the surging automaker is rethinking its strategy.

“Geopolitical issues have a big impact on the automotive industry,” she told Bloomberg. “Now everybody is rethinking their strategy in other countries. We want to wait for more clarity before making our decision.”

BYD’s efforts to establish a base in Mexico were hampered in March, even before President Trump announced sweeping tariffs. That month, China’s commerce ministry delayed approval of the Mexican factory due to concerns the carmaker’s technology could be accessed by the US.

From Pause in Mexico to Progress in Brazil

Although Mexico is no longer in play for the moment, BYD is still moving forward in the region. The company’s new facility in Camaçari, Brazil , is now operational and has room to grow. It currently produces up to 150,000 vehicles a year, with plans to double that figure to 300,000 within two years.

However, the site has not been without controversy. Late last year, Brazilian authorities reported that some international workers at the plant had been living in conditions likened to modern-day slavery.

In response, Li emphasized the company’s commitment to reform. Going forward, she said, BYD will work more closely with local partners to uphold labor and human rights standards.

“We should slow down, step back from the focus on speed,” Li said. “It will take longer, but that’s OK.”