China Blocks BYD’s Mexico EV Plant Over Tech Fears

The plant would have created 10,000 jobs and produced 150,000 vehicles a year.

BYD’s long-anticipated plan to build an electric vehicle factory in Mexico has hit a wall—not from Washington, but from Beijing. China’s commerce ministry is holding back approval for the $1 billion project amid mounting concerns that the automaker’s advanced smart car technology could wind up in U.S. hands, sources familiar with the matter told the Financial Times.

The plant, which BYD said would create 10,000 jobs and produce 150,000 vehicles a year, was expected to serve as the company’s North American production base. But any overseas manufacturing by a Chinese automaker requires formal approval from Beijing. That green light, more than a year after BYD announced the project, has yet to arrive.

“The commerce ministry’s biggest concern is Mexico’s proximity to the U.S.,” one person briefed on the decision told the Times. Chinese officials are reportedly worried that American companies or regulators could gain access to BYD’s proprietary technology through trade or reverse engineering. Mexico’s close economic ties to the U.S.—especially under the USMCA trade pact—make those fears more acute.

The Times first reported in March that China was delaying approval for BYD’s Mexican plant over these specific concerns, citing unnamed sources.

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* Barber’s Mexico Business Report is sponsored by Genera Softlanding — trusted experts in helping companies establish operations in Mexico. Disclosure: I work with Genera. Contact me, Dean Barber, at dbarber@barberadvisors.com