Chinese authorities delay approval for BYD’s pending EV plant in Mexico amid fears of the technology leaking into the US

Booming global EV automaker Build Your Dreams (BYD) has hit a snag with the Chinese government, which has delayed the green light to build a new plant in Mexico amid fears that proprietary technology in the southern part of North America could more easily make its way into the United States

BYD is no stranger to Electrek’s daily EV news beat. The Chinese auto conglomerate continues to prove that it is a global force to be reckoned with, delivering some of the most advanced EV technology within a growing lineup of models across multiple marques.

We’ve already seen BYD expand well outside of its native China into new markets in Asia, Europe, and South America. While we have had opportunities to test drive BYD models in the US, plans to enter its market have been speculation. That prospect appears to be a longshot given the current political climate under the Trump administration and a looming trade war, not only against China but to its neighbors in Mexico and Canada.

Before the current hostile trade environment amongst these global superpowers, BYD had made significant strides in its international production strategy, including new facilities in Brazil, Hungary, and Indonesia. Since 2023, BYD has also been working on erecting a new facility in Mexico and has already delivered some models to the nation, including the Yuan Plus, seen above and below.

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According to a new report, however, BYD’s progress in Mexico has been halted by China’s Ministry of Commerce. The ministry is weary of approving said plant in fears that the automaker’s technology could more easily make its way into the R&D centers of EV automakers in the US.

BYD’s Mexico plant on hold as Chinese Ministry weighs risk

Per The Financial Times, China’s Ministry of Commerce has delayed its approval of BYD’s EV manufacturing plant in Mexico, a vital green light required by domestic automakers to produce EVs overseas. A source in the report cited Mexico’s proximity to the United States as the most significant concern for the delay.

Those respective authorities in China fear that BYD’s advanced (and in many cases, leading) technology could more easily end up in the possession of US competitors through Mexico, as the US neighbors to the south would gain unrestricted access to the Chinese automaker’s technology and production practices. Those powers went as far as to suggest that Mexico could even assist the US in gaining access to BYD’s technology.

That level of paranoia is justified and accurately represents the current trade climate and market competition among global trader partners. There is also growing sentiment of animosity toward the US following proposed tariffs on imports from other countries, like China’s hub of Beijing and even Mexico.

Despite China’s fears, Mexico has taken a stand against both Trump (while simultaneously trying its best to maintain a productive relationship with the US) and China, placing its own tariffs on Chinese textiles. Per a source close to the matter:

Mexico’s new government has taken a hostile attitude towards Chinese companies, making the situation even more challenging for BYD.

Trump has accused Mexico of being a “backdoor” for products produced in China to more easily make their way north to US consumers thanks to NAFTA, which is likely another reason for caution among the Chinese Ministry officials.

BYD is one of several Chinese EV automakers attempting to set up shop in Mexico to gain at least some form of presence in North America. In the past year, we’ve seen Hozon Auto sub-brand Neta and ZEEKR sign multiple regional partnerships to prepare for market entry.

However, those plans, including those of BYD, could be on hold for the foreseeable future as the Chinese government weighs the risk and reward of enabling the technology of those companies to be more susceptible to benchmarking tactics from US competitors.

In BYD’s case, it has not entirely ruled out a plant in Mexico. Still, those plans are certainly in limbo, especially since the Chinese automaker lacks a necessary supply chain in the region and would need to import parts from China, which would certainly face higher tariffs. Per BYD executive vice president Stella Li:

Every day is different news, so we just have to do our job. More study has to be done on how we can satisfy and improve to deliver the best result to everybody.

This is a continuing narrative we will keep an eye on.