Expanding production capacity overseas is vital for automotive companies with global-market ambitions, with General Motors itself boasting quite a few production facilities outside its native U.S. market. With that in mind, Chinese-based automaker BYD is considering an expansion into North America.
According to a report from Nikkei, BYD is considering the establishment of a production plant in Mexico, which would then serve as an export hub to the U.S. market. This is a notable development, as the Chinese EV company recently surpassed Tesla in regard to global all-electric sales volume in Q4 2023.
It’s worth noting that although BYD is a direct rival to Tesla, it certainly competes with General Motors and its Ultium EV portfolio. In addition, there are already several Chinese manufacturers selling vehicles in Mexico, including BAIC, Changan, Chery, JAC and MG Motors. However, their vehicles are largely built in China and exported to the Latin American country.
There are a few advantages for BYD if it were to take this route, such as lower export costs into the United States market. More specifically, the U.S.-Mexico-Canada Agreement imposes tough manufacturing quotas for companies looking to benefit from tariff-free exports into the U.S. market. That, coupled with rising wages in the United States, has made Mexico an attractive location for overseas expansion.
Another notable piece in the equation is the U.S. Federal EV Tax Credit, which stipulates that manufacturing materials and vehicles that are sourced and assembled in North America can receive up to a $7,500 credit, making qualifying EVs all the more alluring to prospective buyers. That said, BYD electric vehicles may not be eligible for any such credits, as recently updated guidelines stipulate that ownership of a raw material producer or battery component manufacturer isn’t permitted, and EVs with battery components sourced from foreign entities of concern – which include China, Russia, North Korea and Iran – don’t qualify for tax credits either.
As far as General Motors is concerned, the majority of GM’s best-selling vehicles in Mexico are actually manufactured in China. As such, the importance of overseas expansion is not an endeavor to take lightly.
Model | Manufacturing Country | 2023 Sales |
---|---|---|
Chevrolet Aveo | China | 52,277 |
Chevrolet Onix | China | 18,545 |
Chevrolet S10 Max | China | 17,635 |
Chevrolet Captiva | China | 17,346 |
Chevrolet Groove | China | 15,912 |
Chevrolet Tornado Van | China | 14,647 |
Chevrolet Trax | Korea | 12,098 |
Chevrolet Silverado/Cheyenne | Mexico/USA/Canada | 11,422 |
GMC Sierra | Mexico/USA | 3,584 |
Chevrolet Cavalier | China | 2,501 |
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Comments
I’ve been saying it. That I wasn’t buying the BS that BYD’s Stella Li was saying that they had no plans to enter the US market for the time being. And I’ll explain why I had a hard time buying this. Six months ago, Doug Demuro was reviewing a BYD Han. And what caught my attention was not the car itself but rather how he got the car. BYD gave it to him to review to gauge American viewer perceptions. I can’t think of any other reason for this than them eyeing the market for sure and that Mexico factory will atleast help them skirt the tariffs. So that being said, these legacy automakers better get their s@#$ together and make these cars affordable or start waving the white flag now.
Although who knows. Maybe Americans won’t even buy the less expensive BYDs just on the inconveniences of living with these cars alone.
This is awesome!!!!! Hopefully we can be rid of the UAW in a few decades.
With the idiots we have running the country and the auto industry these days, all US industry may be eradicated sooner than a few decades.
NAFTA- Not A Freaking Thing For The Americans
Would you rather that they import them from China?
I’d rather they build them in the US.
Whether it is imported from China or Mexico, it steal means destroyed US jobs and the start of the destruction of the US, Japanese, and Korean auto industries.
Because NAFTA is stopping Buick, Lincoln, and Polestar from importing directly from China. BYD could do the same too and simply absorb the costs from their massive profits. But logistics is easier to build them in Mexico and ship completed cars just over the border.
We have been giving away OUR market since the Japanese invasion in the 60’s.
When are we going to learn.
At least, the US should levy the SAME import duties/restrictions on Foreign manufacturers
as they do on the import of American made cars into their Country, whoever it may be.
And, for example, because a Chinese Company may manufacture a their car in Mexico does
not mean it is not a Chinese car.
Shame on GM for producing American vehicles in China! I won’t even buy made in Mexico vehicles. Shame on the Americans buying that garbage! Our President and politicians better pass legislation to outlaw vehicles and products made by our sworn enemies! You are directly supporting countries that are killing our troops!!! Shame, shame, shame!
You realize China sells more cars than the entire US market? GM China sells more cars in China than US, And most US built GM cars have a high percentage of made in China parts. China has positioned itself as the world’s manufacture if everything for less.
You realize China is an authoritarian adversary of the west and at any day can (and I think will) make a play on Taiwan? Meanwhile GM removed all their eggs from every other basket, (Europe, India, Australia, etc.,) and put it into Chinas basket only without any regard of safeguarding their risks. At any point the Chinese government can do like Russia did after invading Ukraine and nationalize all foreign assets that are in the mainland and GM will have nothing left to hold onto but their d*** in their hand and only the NA market. Don’t forget they are joint ventured with SAIC which is a state-owned (i.e. CCP) company and can easily be forced to turn over their share of the JV. And then what? It’s not till recently that GM finally woke up to the reality of the situation, as they also lose market share in China, that they can’t take that massive market for granted and need to diversify their markets. Again, I am not saying GM should abandon China by any means. But pulling out of every other market (instead of pushing to be more competitive) to focus on only China is a disastrous move that can land up costing them dearly. If China invades Taiwan, I fail to see how GM will walk away from that unscathed.
Extremely well said! Bravo!