BUSINESS

Chinese EV Makers Join the Mexico Investment Wave to Get Round U.S. Tariffs

Published: Jun. 20, 2025 5:51 a.m. GMT+8

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A BYD Co. Seal electric vehicle at the company's Insurgentes showroom in Mexico City on Nov. 14, 2024.

Despite shifting U.S. tariff policies, Mexico remains a magnet for foreign investors — including Chinese electric vehicle (EV) giants.

Two Chinese EV companies are currently in talks to build factories in Durango, a northern Mexican state with growing industrial clout, a local official confirmed Wednesday. Arturo Ortiz Galán, head of Durango’s investment department, revealed the ongoing negotiations at the Mexico Trade and Investment Opportunities Forum. While he declined to name the companies, he noted that they may pursue a joint venture model for the projects.

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Chinese EV companies are negotiating to build factories in Durango, Mexico, potentially via joint ventures, amid rising U.S. tariffs on Chinese goods.
Bilateral China-Mexico trade hit $109.4 billion in 2024; the number of Chinese businesses in Mexico rose from 2,000 in 2020 to over 20,000.
Mexico’s proximity to the U.S. and trade agreements make it attractive for Chinese firms seeking tariff exemptions and U.S. market access.

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Who’s Who

BYD: BYD, a Chinese EV manufacturer, is exploring establishing an assembly plant in Jalisco, Mexico. This move is part of BYD's broader strategy to expand operations beyond China, driven by the desire to leverage Mexico's proximity to the US and circumvent US tariffs through regional trade agreements.

Haitian International Holdings Ltd.: Haitian International Holdings Ltd. is a Ningbo-based manufacturer of auto parts machinery. They have a plant in Jalisco, Mexico. Haitian International Holdings Ltd. met with BYD executives who were exploring setting up an assembly plant in Jalisco.

SAIC: SAIC, a Chinese automaker, is actively pursuing the establishment of plants in Mexico. This move is largely influenced by rising U.S. tariffs on imported vehicles and components. By producing in Mexico, SAIC can potentially bypass these tariffs due to exemptions under the US-Mexico-Canada Agreement.

Great Wall Motors: Great Wall Motors is a Chinese automaker actively exploring the possibility of building plants in Mexico. This trend is driven by U.S. tariff increases, as companies seek to leverage Mexico's proximity and trade agreements like the US-Mexico-Canada Agreement to access the U.S. market while avoiding new tariffs on imported vehicles and components.

JAC Motors: JAC Motors is a Chinese automaker actively building plants in Mexico or exploring the possibility, driven by U.S. tariff increases. By nearshoring in Mexico, JAC Motors can potentially exploit the US-Mexico-Canada Agreement, exempting their Mexican-made vehicle parts from new U.S. tariffs.

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What Happened When

2018：: Washington began imposing steep tariffs on Chinese imports, prompting Chinese firms to view Mexico and Canada as alternative access points to the U.S. market.

By early 2020：: There were about 2,000 Chinese businesses registered with official Chinese institutions in Mexico.

2024：: Bilateral trade between China and Mexico reached $109.4 billion, with Chinese exports accounting for more than $90 billion.

2025-03：: EV giant BYD sent a delegation to Jalisco, Mexico, to explore setting up an assembly plant; meetings were held with local officials and suppliers.

2025-04：: The U.S. imposed a 25% duty on all imported vehicles.

2025-05：: The U.S. imposed another round of tariffs targeting key components such as engines, transmissions, and lithium batteries; Brookings Institution published a report noting China’s increased motivation to use Mexico as a gateway due to rising U.S. tariffs.

By 2025-06：: The number of Chinese businesses registered with official Chinese institutions in Mexico has soared to more than 20,000.

2025-06-18：: Arturo Ortiz Galán, head of Durango’s investment department, confirmed that two Chinese EV companies are in talks to build factories in Durango.

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