By: David Goadby

David Goadby — Tue, 25 Jun 2024 19:55:58 +0000

BYD’s employment & sales assertions appear quite optimistic. Even with the existing investment in BYD by Berkshire-Hathaway, BYD could be facing strong headwinds. The US has already imposed 100% tariffs on Chinese EVs. Canada is likely to follow suit. There’s currently a significant global slowdown of full EV’s sales (vs. hybrids) outside China. This slowdown is primarily driven by increasing knowledge & experience-based initial buyer resistance to full EV ownership. Mexico’s infrastructure to support mobile & home charging of full EVs is also seriously lacking at this time. It’s unlikely that Mexican-assembled Chinese EVs will be able to skirt the domestic content requirements of the USMCA, despite the probable anticipation of Chinese EV manufacturers now seeking to invest in Mexican assembly facilities.
Mexico has developed a significant existing automotive sector. It currently contributes handsomely to Mexico’s GDP. That growing sector primarily consists of well-established US & European-based auto manufacturers & parts suppliers who are generally no friends of the many upstart Chinese EV manufacturers. When opening the door wide to Chinese EV manufacturers in the name of nearshoring, Mexico might want to be careful what it wishes for in respect of possible oversaturation. There are potentially many other existing + new-to-Mexico industrial sectors where the country might well realize more significant & sustainable overall economic & employment advantages through its nearshoring aspirations & opportunities.

Comments on: Chinese EV maker BYD says planned Mexico plant will create 10,000 jobs

By: David Goadby