Whereas the U.S. continues to limit Chinese language electrical automobiles from getting into its market, its neighbors are more and more embracing inexpensive and well-made Chinese language EVs.
The newest model to indicate curiosity in capitalizing on the rising Latin American EV market is MG Motor. The previous British model is owned by China’s state-owned SAIC Motor, and it now plans to determine a producing facility and a analysis and improvement middle in Mexico.
The specter of the Mexico backdoor.
U.S. automakers concern that low-cost and well-made Chinese language EVs, that are already flooding Mexico, might additionally enter the U.S. if these manufacturers set-up vegetation within the nation. Whereas U.S. might be a profitable marketplace for them, it isn’t the one nation they’re all in favour of. They see incomes rising in South America and Latin America as effectively, the place they plan to develop no matter America’s protectionist insurance policies.Â
By increasing additional into Mexico, the place it already sells fashions just like the all-electric MG4 and the MG3 hybrid, it might be capable of “not solely produce automobiles, however to additionally produce market intelligence particularly designed for and by Latin America,” nation lead Zhang Wei stated in an announcement.
The automaker stated the Mexico plant, whose development time and site particulars weren’t revealed, would assist the SAIC Group develop and develop into the Caribbean and Latin America. The enlargement would additionally permit MG Motor to launch its luxurious model, IM, in these markets, one thing the automaker stated is on the playing cards.
MG Motor already has vegetation in China, Thailand and India. Plus it is planning to construct a manufacturing facility in Europe, the place it’s the best-selling Chinese language model with practically 128,000 models bought within the first half of 2024, as per Dataforce numbers reported by Automotive Information.
Mexico is rising because the hotspot in North America for Chinese language EVs. Manufacturers like BYD and Chery Vehicle already promote automobiles within the nation. Reuters reported that one in 10 automobiles bought in Mexico final 12 months had been Chinese language. Given the tempo of Chinese language investments within the nation, that share will doubtless proceed to develop.
Tesla additionally plans to construct a manufacturing facility in Mexico, however these plans are on pause as the corporate awaits the end result of the presidential elections in November.
If Donald Trump will get elected, it might actually damage the U.S. auto business. He has vowed to amend the U.S. Mexico Canada (USMCA) free commerce settlement and slap 100-200% tariffs on automobiles made in Mexico. A ton of automobiles bought within the U.S. are made in Mexico, together with these from Basic Motors, Ford, Mazda, Nissan, BMW and numerous others.
These automobiles must be made within the U.S., he stated on the Republican Nationwide Conference, implying that he would permit Chinese language carmakers to construct factories within the U.S. Mexico, nonetheless, lately indicated that it was distancing itself from Chinese language manufacturers and had reportedly halted talks with BYD after strain from the U.S.