© Reuters. The logo of the BYD Auto company is seen on a BYD SEAL electric vehicle during a BYD store opening at the car dealership Sternauto in Berlin, Germany January 31, 2024. REUTERS/Annegret Hilse
(Reuters) -China’s BYD Co (SZ:) Ltd will set up a new electric vehicle (EV) factory in Mexico, reported on Wednesday, citing the company’s Mexico head, as the EV maker aims to establish an export hub to the United States.
BYD, known for its cheaper models and a more varied lineup, recently overtook its biggest rival Tesla (NASDAQ:) Inc to become the world’s top EV maker in terms of sales.
According to the Nikkei report, BYD has launched a feasibility study for the Mexican plant and is currently negotiating with officials over terms, including the factory’s location.
While BYD has its sales concentrated in China, it also aims to expand globally and is building new plants overseas in addition to expanding Chinese exports.
Mexico’s massive automaking sector, populated by many of the industry’s top global players, is tightly integrated with the U.S. industry.
“Overseas production is indispensable for an international brand”, BYD Mexico country manager Zhou Zou told Nikkei.
The carmaker’s Mexico office declined to comment.
Major U.S. automakers have warned that Chinese cars could spell doom for their own prospects, among them Elon Musk’s Tesla.
Last month, Tesla’s chief executive predicted that Chinese automakers will “demolish” global rivals without trade barriers.
Musk’s view is echoed by a leading trade group.
“The introduction of cheap Chinese autos – which are so inexpensive because they are backed with the power and funding of the Chinese government – to the American market could end up being an extinction-level event for the U.S. auto sector,” according to a report by the industry group Alliance of Automotive Innovation.
In Latin America, BYD plans to spend 3 billion reais ($620 million) on a new industrial complex in northeastern Brazil.
The three plant complex will be built in northeastern Bahia state, on land formerly occupied by a Ford (NYSE:) plant that closed in 2021.
($1 = 4.9510 reais)