- BYD claimed half of Mexico’s EV and plug-in hybrid sales last year.
- New rules would slap heavy tariffs on cars from China, India, South Korea.
- GM, Ford, Stellantis escape tariffs, a move expected to please Trump.
Mexico is weighing a steep new tariff that could reshape its car market for years to come, proposing a 50 percent duty on vehicles imported from nations without free trade agreements. Importantly, that list includes China, meaning the move could weigh heavily on fast-growing player BYD and even affect Tesla at a time when electric car sales in Mexico are beginning to gain momentum.
Read: Mexico Has Had Enough With Chinese Car Imports
The tariff proposal, made public last week, wouldn’t stop at EVs. It would also hit combustion-powered cars from countries with no trade deals, a group that includes South Korea and China, both global automotive heavyweights, as well as India, Indonesia, and Russia, which play a smaller or more regionally focused role in the industry. Interestingly, American brands would be spared.
Automakers on Edge
Analysts suggest the new levy could put the brakes on BYD’s rapid rise in Mexico. Eugenio Grandio, president of the Electric Mobility Association in the country, put it plainly: “It’s definitely a game-changer. Fifty percent is a very aggressive number.”
Reuters reports that the tariff plan still requires approval from Mexico’s Congress before it can be enacted. General Motors, Ford, and Stellantis would sidestep the new duties thanks to their production plants in Mexico, which let them bring in a share of vehicles without tariffs. On the other hand, while BYD and Tesla have both discussed adding factories to their Mexican portfolios, so far those projects have failed to progress.
Tesla Has Solutions
Tesla’s pipeline to Mexico has so far depended entirely on its Shanghai facility, which has produced every Model 3 and Model Y sold there since mid-2023, Salvador Rosas of the Tesla Owners Club in Mexico, told Reuters. Still, analysts suggest the company has a buffer, with local stockpiles that could give it room to shift supply from other plants, including those in the United States.
BYD’s Mexican Plans Shunted
Back in 2023, BYD said it would build a new car factory in Mexico. However, these plans were ditched earlier this year after pressure from Mexican authorities who were worried approving such a plant could be detrimental to trade relations with the United States and would potentially upset President Donald Trump.
Despite the setback, BYD has enjoyed a meteoric rise in Mexico in recent years. Last year, it sold approximately 40,000 vehicles in the country, accounting for nearly half of all EV and plug-in hybrid sales nationwide. That momentum has continued into this year, with sales on track to double once again.
