Mexico Won't Offer EV Incentives to Chinese Automakers
Chinese automakers are expanding into Mexico, with companies like BYD opening dealerships across the country. Even so, the Mexican government isn’t rolling out the red carpet due to pressure from the United States. Automotive News reported that the country would not offer tax incentives or land discounts to Chinese automakers. It noted that the U.S. government believes that they should not be able to enter North America without paying tariffs.
Mexico is no stranger to Chinese auto companies, as there are around 20 already selling vehicles in the country. BYD, one of the largest, said it plans to greatly expand its sales operations in Mexico with dozens of dealerships by the decade’s end. U.S. government officials, especially those in the White House, have long expressed concerns about allowing Chinese-made vehicles into our country, citing national security concerns, but it’s unclear if the Mexican government treats them any differently than other brands.
The pressure coming from U.S. officials is likely due to its worries about Chinese companies establishing a manufacturing foothold in Mexico as a workaround to costly tariffs. They also want to take action to protect American EVs from cheap or subsidized Chinese models.
Security issues aside, Chinese EVs are generally cheaper than comparable models from American and other brands, which is a good thing for Mexican car buyers. That said, people there don’t buy that many of them, with EVs comprising just 0.5 percent of the Mexican auto market in 2022.
[Image: Mark Pitt Images via Shutterstock]
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Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
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How about telling China and Mexico, we'll accept 1 EV for every illegal you take off our hands ;)
While reading the article a thought crossed my mind. Does Mexico have a fairly good charging infrastructure in place? Knowing that it is a bit poorer economy than the US relatively speaking, that thought along with who's buying came to mind.
Under NAFTA II or the USMCA basically the US and Canada do all the designing, planning, and high tech work and high skilled work. Mexico does all the medium-skilled work.
Your favorite vehicle that has an Assembled in Mexico label may actually cross the border several times. High tech stuff is installed in the US, medium tech stuff gets done in Mexico, then the vehicle goes back across the border for more high tech stuff the back to Mexico for some nuts n bolts stuff.
All of the vehicle manufacturers pass parts and vehicles between factories and countries. It's thought out, it's planned, it's coordinated and they all do it.
Northern Mexico consists of a few big towns controlled by a few families. Those families already have deals with Texan and American companies that can truck their products back and forth over the border.
The Chinese are the last to show up at the party. They're getting the worst land, the worst factories, and the worst employees. All the good stuff and people have been taken care of in the above paragraph.
Lastly, the Chinese will have to make their parts in Mexico or the US or Canada. If not, they have to pay tariffs. High tariffs. It's all for one and one for all under the USMCA.
Now evil El Scotto is thinking of the fusion of Chinese and Mexican cuisine and some darn good beer.
TG grows skeptical about his government protecting him from bad decisions.