BYD Pauses Ambitious Mexico Factory Project Amid Ongoing Trade Tensions with the U.S

According to a recent report from Bloomberg News, BYD Co., the leading electric vehicle manufacturer in China, has decided to pause it’s plans for a notable manufacturing facility in Mexico.This decision is largely influenced by ongoing geopolitical tensions and uncertainties related to U.S. trade policies under President Donald Trump.

While BYD is still keen on expanding its presence in the Americas,there’s no set timeline for new investments. Stella Li, the company’s executive vice president, shared these insights during an interview on july 1 in Bahia, Brazil—where they are launching their first factory outside of Asia.

“The automotive sector is heavily affected by geopolitical factors,” Li noted.“Many companies are reevaluating their strategies abroad.We prefer to wait until we have clearer facts before proceeding.”

Before halting its search last year due to the uncertainty surrounding the U.S. presidential election results, BYD had been exploring three potential sites in Mexico for this new plant.

In March, Mexican President Claudia Sheinbaum mentioned that BYD had not formally proposed any investment plans for mexico. Additionally, concerns from China’s commerce ministry regarding potential access of U.S. entities to BYD’s technology led to delays in approving the project.

This situation unfolded prior to Trump imposing extensive tariffs on various trading partners and specific taxes on imported goods like automobiles—disrupting established supply chains across industries.

American automakers have raised alarms about these tariffs potentially costing them billions more; General Motors recently announced it would invest $4 billion as part of a strategy to relocate production of several pickup trucks and SUVs from Mexican factories back into the United States.

The timeline for further expansion remains uncertain due to this unpredictable global trade landscape, according to Li.

Brazilian Factory Insights

Li made her comments during an event celebrating the opening of their Brazilian facility—their first venture outside Asia . Though ,this expansion hasn’t come without controversy; Brazilian labor prosecutors filed lawsuits against BYD and two contractors over allegations related to forced labor during construction at their Camaçari site . span > p >in response , BYD reaffirmed its commitment “to human rights and labor standards” while promising compliance with both Brazilian laws and international labor regulations . span > p >This incident has prompted a shift in how they approach future international projects , emphasizing slower growth with stronger local partnerships . “We need a more measured pace,” she explained . “Collaborating closely with local businesses will take longer but is essential.” span > p >Once fully operational , the Camaçari factory aims for an annual output of 150,000 vehicles , with aspirations of doubling that capacity within two years as production ramps up . The facility will focus on final assembly using components shipped from china , with commercial operations expected within two months according to Li . span > p >Plans are already underway for further capacity increases down the line ; though details remain sparse at this stage. span > p >BYD has also requested that Brazil reduce import tariffs on vehicle kits intended for assembly during initial operations—a move highlighted by Alexandre Baldy , senior VP at BYD Auto Brasil who stated that taxing semi-assembled cars at full rates makes little economic sense if they’re meant only for final assembly here.” The Brazilian government has yet respond officially regarding this request.” span > p >