Mexico’s Minister of Economy- Use all legitimate interests to support North America amid competition between the United States and China
China’s leading electric vehicle manufacturer, BYD, is set to announce the location of its first factory in Mexico by the end of the year. This news was highlighted by Mexico’s Economy Minister, Marcelo Ebrard, during a recent business forum. Ebrard noted that the tensions between China and the United States have intensified compared to a few years ago, prompting Mexico to develop a strategic plan that leverages all legitimate interests to support North America.
According to Voice of America, Ebrard emphasized Mexico’s second mission: to accelerate nearshoring by shifting production from Asian factories to Mexico. He pointed out that currently, less than 20% of the components used in Mexico’s exported manufacturing are sourced domestically. Mexican officials are exploring ways to reduce the country’s reliance on imports across various sectors, aiming to increase local sourcing throughout the supply chain. The government plans to collaborate with specific companies to encourage suppliers and component manufacturers to set up operations in Mexico.
Ebrard further explained that the goal is not just to increase market share but to boost domestic production. It is essential to work closely with each company, providing them with dedicated funding and personnel, while maintaining patience and continuous follow-up to improve these figures.
In related news, BYD recently announced its plans for its first factory in Mexico and expects to sell 50,000 electric vehicles (EVs) in the country this year, with a target of reaching 100,000 by 2025. The first phase of the factory’s development will have a production capacity of 150,000 EVs annually, with plans to expand that number to 300,000.
After the departure of former President Andres Manuel Lopez Obrador, a decree allowing electric vehicles imported from countries without a trade agreement with Mexico to be exempt from tariffs of 15% to 20% expired at the end of September 2023. Since beginning to sell imported electric vehicles in Mexico this year, BYD is seeking an extension of the tariff reduction policy. This includes plans for a new factory in Mexico, which could create approximately 10,000 jobs. Other alternatives being considered involve granting tariff exemptions, reduced tariffs, or quotas for the company.
