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[MEXICO CITY] Mexico’s plan to levy tariffs of up to 50 per cent on vehicles from China may not unduly impact the Asian nation’s auto manufacturers whose inherently lower production costs mean their cars are still competitive.
BYD, the world’s biggest maker of electric cars based in Shenzhen, sells its Dolphin Mini, a small hatchback that’s imported from China, in Mexico for around 399,800 pesos (S$27,556), for example. General Motors’ Equinox, one of the least expensive electric cars available in the country from a legacy brand, starts from about 876,990 pesos.
While BYD put plans to build its own manufacturing plant in Mexico on hold indefinitely due to geopolitical issues and trade tensions with the US, the supply chain efficiencies and cheaper labour and materials it and other Chinese carmakers enjoy at home mean they can still sell vehicles overseas at attractive prices.
“Chinese new energy vehicles are very competitive in Mexico, especially considering the gasoline cars produced locally tend to be older models and have limited technological features,” said Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight.
Mexico has become the top receiver of Chinese cars, replacing Russia after it raised fees on imported vehicles and higher borrowing costs sapped consumer spending. China sent about 280,100 vehicles to Mexico in the first half of 2025, up 24 per cent year-on-year.
Considering the price differential of Chinese-made cars, automakers from Asia’s largest economy may have a similar experience in Mexico as they have in Europe.
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Chinese EV exports to Europe fell after an anti-subsidy investigation was launched in 2023 but have since rebounded. Chinese brands’ share of the EV market reached about 10 per cent in June and July, the highest in a year.
Whether Chinese car exports to Mexico will ultimately hold is less sure given that the proposed 50 per cent tariff covers all cars, not just electric ones. Consumer spending power in Mexico is also lower than in Europe, so the hit to demand after increasing sticker prices to account for the tariffs may also be greater, Zhang said.
Michael Dunne, chief executive of Dunne Insights and a former president of General Motors Indonesia, said higher tariffs on Chinese imports will slow the flood, but not stop it.
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“There are already several hundred thousand Chinese cars running on Mexican roads and scores of Chinese car dealerships,” he said. “That Chinese beachhead doesn’t just vanish.” BLOOMBERG
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