BYD Americas CEO Stella Li claims EV maker has no interest in U.S. market

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BYD’s plans to build a manufacturing plant in Mexico should not be misconstrued as an intention to export into Tesla’s domestic market, a senior executive for the Chinese carmaker claimed.

In an interview aired on Monday, BYD Americas CEO Stella Li said now that construction on a new plant in Brazil has commenced, her team is busy evaluating site candidates in a 200-kilometer (124-mile) radius around Mexico City, with a decision slated for the latter half of this year.

She added the Chinese company had little interest in targeting U.S. consumers as the upcoming factory would first and foremost serve Mexican customers looking to purchase an EV or plug-in hybrid.

“We’re not planning to come to the U.S.,” she told Yahoo Finance. When pressed why, she explained: “It’s an interesting market, but it’s very complicated if you’re talking about EVs.”

Read more: Trump says he’d hit cars made in Mexico by Chinese companies with 100% tariff, brushes off retaliation by Beijing: ‘You screw us and we’ll screw you’

Li cited the recent pause in EV investment as evidence of a slowdown in U.S. consumer adoption and compared that with China, where if a company does not invest in EVs “you are out, you will die, you have no future.”

However, the firm’s plan could eventually change. This wouldn’t be a surprise as Mexicans may build EVs, but they sure don’t buy them. Industry data for the first 11 months showed cumulative demand at 11,766 vehicles. The number for plug-ins (PHEVs) is even smaller.

While it’s a tried and tested method—Ford, for example, manufactures in Mexico and ships to the U.S. duty-free—Li needs to be careful in the current political environment, as a U.S. trade group recently warned of an “extinction-level event” posed by Chinese carmakers.

Any decision BYD may take ahead of this November’s vote will therefore likely become fodder for the U.S. election campaign. An adversarial approach to China is one of few economic issues these days that enjoys bipartisan support in Washington. There’s even a House Select Committee devoted to “strategic competition” with the Chinese Communist Party.

Political headwinds mounting for BYD

BYD sales eclipsed those of longtime heavyweight Tesla in the fourth quarter, sending a shock through the industry. It doesn’t look like BYD will give the gong back anytime soon, with new plans to expand deeper into Europe along with a number of other markets.

“If you are the winner in the most competitive market [China], why can’t you win in other markets? It’s just about a timing issue,” said Li.

Yet BYD’s success has suddenly put it in the political crosshairs of Western governments wary that China has created an unbeatable EV industry that controls vital links in production, including lithium refining and battery cell production.

“China is 70% of the supply chain,” Li boasted, criticizing the U.S. for misguided attempts at protectionism, such as federal tax subsidies closed to Chinese battery cell suppliers.

Looking ahead to production in new plants, Brazil offers a warmer welcome to Beijing than Washington at the moment. The two agree on a number of economic issues and are both founding members of the supranational BRICS group of emerging markets, recently expanded to include Iran.

BYD’s play for the Brazilian market therefore appears to be a low-risk bet, where it can offer a compelling entry-level option in the Dolphin, Brazil’s bestselling EV. Local production on the grounds of a former Ford facility is expected in the coming months.

While Brazil is a major automotive consumer with 2.18 million light vehicles sold in 2023, its growing EV market is infinitesimal in size as the main alternative to gasoline is sugarcane-derived ethanol, which is available at most filling stations. Many new vehicles also come equipped with bivalent “flex-fuel” combustion engines that can burn either or a blend thereof.

According to figures from the Brazilian association for electric vehicles ABVE, just over 19,300 fully electric vehicles were sold in 2023 compared with almost 1.2 million in the United States, of which 55% were Teslas.

To outsiders it may seem BYD’s focus on EV laggards like Mexico and Brazil makes less sense than edging into America, but Li doubled down on her message: “We’re not really planning to come to the U.S.”

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Source link : https://fortune.com/2024/02/27/byd-america-mexico-manufacturing-plant-politics-tesla-brazil/ Author : Publish date : 2024-02-27 03:00:00 Copyright for syndicated content belongs to the linked Source .