BYD is considering setting up an EV plant in Mexico as it seeks to establish an export hub to the US, Nikkei reported.

(Image credit: CnEVPost)

BYD (OTCMKTS: BYDDF) is considering setting up an electric vehicle (EV) plant in Mexico as the automaker seeks to establish an export hub to the US, a company executive said, according to a report from Nikkei today.

For an international brand, overseas production is indispensable, Nikkei quoted Zou Zhou, country manager of BYD Mexico, as saying.

Zou called Mexico a key market with vast potential and expressed eagerness to build a plant in the country, according to the report.

BYD has initiated a feasibility study for a Mexican plant and is in talks with national and local government officials about the plant's location and other terms, the report noted.

Zou did not disclose where BYD might build its plant, but the northern state of Nuevo Leon and the Bajio region in central Mexico appear to be leading candidates, the report said, adding that the Yucatan Peninsula and other parts of southern Mexico are also possible options.

BYD's rival Tesla (NASDAQ: TSLA) plans to build a gigafactory in Nuevo Leon for the production of next-generation vehicles.

The biggest advantage of locating production capacity in Mexico is lowering the cost of exports to the US, the report noted. The US-Mexico-Canada agreement imposes stricter North American manufacturing quotas on automakers looking to benefit from tariff-free exports to the US market.

BYD launched the Dolphin compact EV in Mexico in September 2023, its fourth model in the country after the Han, Tang, and Yuan Plus.

BYD has quickly become the world's largest new energy vehicle (NEV) maker over the past few years, with half of its sales being battery electric vehicles (BEVs) and the other half being plug-in hybrid electric vehicles (PHEVs).

The Chinese NEV maker sold 526,409 passenger BEVs in the fourth quarter of last year, surpassing Tesla's 484,507 vehicles for the first time.

For the full year 2023, BYD sold 3,024,417 NEVs, a 62.3 percent increase year-on-year.

BYD is entering overseas markets, but their contribution to sales is currently limited.

The company sold 242,765 overseas NEVs in 2023, up 493.51 percent year-on-year, but contributed only 8 percent of sales, according to data compiled by CnEVPost.

BYD's passenger car plant in Thailand began construction in March 2023 and is expected to start production in 2024, with an annual capacity of about 150,000 units.

Construction of BYD's plant in Uzbekistan began in May 2023 and production started last month.

In July 2023, BYD said it would set up a large manufacturing base complex in Brazil, which is scheduled to start production in the second half of 2024, with a planned annual capacity of 150,000 vehicles for the NEV line.

On January 30, BYD signed a preliminary land purchase agreement with the government of the city of Szeged for its passenger car plant in Hungary.

BYD to build charging facilities in Brazil with local energy firm Raízen Power