BYD explores Jalisco state in Mexico for potential EV plant location

China’s top electric-vehicle maker, BYD Co., sent a delegation to the Mexican state of Jalisco to consider building an EV plant there. Company executives from China met with state officials last week, according to Roberto Arechederra, Jalisco’s economic development secretary.

BYD officials also met with Chinese suppliers already in Jalisco, such as Haitian, which makes machines for autoparts, he said in an interview. “The company conducted a very in-depth analysis of how many educational centers there are, population volumes near the places where they could put their plant," Arechederra said. “They saw the ecosystem of the state, its infrastructure."

The cost of building a Mexico plant would likely be around $600 million, which is similar to what BYD paid for its EV facility in Brazil, according to a person close to the situation who asked to remain anonymous because the talks aren’t public.

A BYD representative declined to comment on the Jalisco visit, the plant’s potential cost or other Mexican states that are being considered for an EV factory. In a statement to Bloomberg, Stella Li, BYD’s Americas chief, said the automaker’s recent introduction of the Dolphin Mini model to Mexico included a visit to “various states of the republic where the company is exploring business opportunities, with the aim of contributing innovation and technology."

Mexico has seen a surge in investment from both Chinese and western auto manufacturers. Tesla is building a mega-factory in the northern state of Nuevo Leon, with an estimated investment of $10 billion over several phases. Tesla’s initial investment will be $4.5 billion, according to the Nuevo Leon government.

Chinese rivals including BYD, Chery Automobile Co. and JAC Motor are also rapidly increasing sales in Mexico and all plan to open production facilities in the country.

Also watch: BYD Seal EV launched in India: Worry for Hyundai Ioniq 5, Kia EV6?

Jalisco has already attracted many companies in the EV industry and is actively working with Tesla to boost its supplier base.

“We have been working with Tesla for a long time and continue to work with them," Arechederra said. He referred to companies already established in the state such as Tesla supplier USI, China’s Foton, which is assembling electric buses and cargo trucks there, and Beccar, which is collaborating with Foton.

Jalisco is working on incentives to boost EV investment, including a platform to help companies recruit workers and the establishment of 11 business contact offices in key municipalities, Arechederra said. The airport of Guadalajara is being remodeled, and the state’s proximity to the port of Manzanillo offers a logistics advantage for Chinese companies, he added.