The Mexican government’s plans to raise tariffs on Chinese-made cars to 50% could stall BYD’s growth engine in the North American market
Key Takeaways:
- The Chinese car maker supplies nearly half of all electric vehicles sold in Mexico
- BYD has shelved plans to build a factory in Mexico and is much more exposed to higher import tariffs than its U.S. rival Tesla
Chinese electric cars have become a common sight on the streets of Mexico as they glide through busy traffic. But with new trade ructions, the road ahead could be bumpy.
Mexico has announced plans to slap 50% tariffs on car imports from countries that are not covered by its free trade deals, including China. The measures, which apply to both conventional and electric vehicles, would hit foreign brands that sell imported models, such as Tesla (TSLA.US) and BYD Company Ltd. (OTCPK: BYDDY) (OTCPK: BYDDF) (1211.HK; 002594.SZ), potentially reshaping the region’s auto market.
The Mexican government cited the need to protect local jobs, but industry experts saw the higher tariffs as a move to mollify the United States.
Flavio Volpe, president of the Canadian Automotive Parts Manufacturers’ Association, toldReuters that the Trump administration would look “very favorably” on the decision, which would help U.S. automakers compete with BYD.
Tesla also relies on overseas imports, but the increased tariffs would inflict much more damage on China’s BYD.
Tesla operates a factory in Texas and has proposed building a giant complex in Monterrey, Mexico, that could allow production capacity …
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