China’s government has put the brakes on BYD’s plans to build a new electric car factory in Mexico. The reason? They’re worried that BYD’s tech might leak to American rivals.
Imagine a high-stakes game of cat and mouse, where the prize is dominance in the electric car market. China’s Ministry of Commerce is playing it cautious, delaying the factory’s approval. They fear that if BYD’s tech gets into the wrong hands, it could give US companies an edge.
This isn’t just about China being protective – it’s about the rapidly shifting landscape of the electric car market. BYD has been on a tear, selling over 526,000 electric cars in the fourth quarter of 2023, surpassing Tesla’s 484,507. The company’s aggressive pricing and expansion into international markets have paid off.
But the US and Europe are getting nervous. They’re slapping tariffs on Chinese electric cars, citing unfair competition due to China’s subsidies for its car manufacturers. The goal is to reduce dependence on Chinese supply chains and protect domestic industries.
BYD wants to crack the American market, and setting up shop in Mexico is a clever move. The US-Mexico-Canada trade agreement (USMCA) makes it easier to export cars to the US, and Mexico’s lower labor costs would give BYD a competitive edge.
In 2024, BYD sold over 1.7 million electric cars, just shy of Tesla’s 1.79 million. But when you look at BYD’s total sales, including all types of cars, they’re closing in on 4 million. The company’s electric car production has surpassed Tesla’s, with 1.77 million units.
BYD’s been on a roll since its founding in 1995, evolving from a battery maker to a successful electric car manufacturer. In March 2025, they unveiled the Super e-Platform, which can charge a car to 400 km in just 5 minutes. They’ve also introduced the God’s Eye system, an advanced driver-assistance system similar to Tesla’s FSD.
China’s worried that if BYD’s tech falls into the wrong hands, it could lose its edge in the electric car market. With Mexico’s close ties to the US, building a factory there might not be as smooth as BYD hoped. For now, it looks like China is hitting the pause button on this project.