BYD Narrows Down Mexico Plant Locations Amid Competitive Incentives

Chinese electric vehicle manufacturer BYD is finalizing its options for a new manufacturing plant in Mexico, with three states under consideration. Officials are evaluating various incentives including fiscal benefits, land, and infrastructure. The plant aims to produce up to 500,000 units annually, serving the Mexican market exclusively.

Chinese electric vehicle maker BYD has narrowed its list of finalists for the location of a manufacturing plant in Mexico down to three states, reviewing a range of proposed incentives from them, the firm's country head said on Wednesday. Jorge Vallejo, BYD's Mexico director general, informed Reuters that the company is analyzing the latest proposals from the candidate states, which have offered fiscal, land, management, and preferential pricing benefits.

"A plant is not only about having the space, but the logistics, all the development, urban infrastructure that is generated, water, gas, everything that is needed for an automotive plant," Vallejo explained. He added that the aim remains to identify the location by year-end.

Reuters reported in April that Mexico's federal government, under U.S. pressure, is keeping Chinese automakers at arm's length by not offering incentives such as low-cost public land or tax cuts for EV production. Vallejo did not name the states offering incentives, although BYD Chief of Americas Stella Li mentioned in May that the plant would be centrally located in the country.

Meanwhile, Mexico's northern Nuevo Leon state, an automotive hub, is proposed to house a Tesla mega-factory and a new Volvo plant, according to the state's governor. The central Puebla state has long housed production by Volkswagen, and BMW manufactures EVs in the nearby San Luis Potosi.

Speaking following the unveiling of BYD's Song Pro plug-in hybrid SUV in Mexico, Vallejo said the firm had yet to identify which models would be produced at the Mexico plant. The plant is expected to produce 150,000 units in its first stage, another 150,000 in the second stage, and ultimately between 400,000 and 500,000 units over a few more years.

The plant will cater exclusively to the Mexican market, Vallejo reiterated, stating that BYD was not planning an entry into the U.S. market. BYD executives aim to meet with Mexican President-elect Claudia Sheinbaum's team and the economy ministry shortly to share their plans for the plant.

"We will specifically present the manufacturing and marketing scheme and also show what BYD can develop at a national level," Vallejo said. Separately, French-Italian automaker Stellantis began EV production at its State of Mexico plant on Tuesday, as noted by a post on X by Mexico's Economy Ministry.

Speaking at the event, Economy Minister Raquel Buenrostro urged global companies "to continue working together and continue strengthening supply chains," according to the ministry.

(With inputs from agencies.)