Mexico. It’s China’s backdoor to the US EV market. At least it was. Chinese automakers have been investing millions building EV factories South of the border. Their goal? Avoid the high US tariffs on cars imported from China. That 27 1/2% tax doesn’t apply to vehicles with at least 3/4 of their core parts built in the continent of North America. So Chinese companies could set up shop in Mexico, make their EVs there, and then sell them to Americans at cheaper rates than US automakers. Beijing dominates the supply chain for the materials needed to make electric vehicles. As a result, on average, EVs in China already cost nearly $20,000 less than they do in the US. They’ve used this pricing advantage already in Europe, where Chinese made EVs have flooded the market. Expected to take up 1/4 of EV sales in Europe this year, all China needed was a way to offer those savings to American drivers, and Mexico was their way to do that until now. According to Reuters, Mexican officials have told executives from BYD, China’s largest EV maker, they won’t be getting any special treatment. Chinese car brands will not receive incentives to build their factories in Mexico like those awarded to other automakers in the past. That means no low cost public land deals or tax cuts for their investments in EV production. The Mexican government also told BYD they’ll be putting a pause on any future meetings with car companies from China. This is reportedly been attributed to pressure from the US government, which, while trying to get more EVs on American roads, is simultaneously working to keep Chinese ones out. A White House spokesperson said those EVs from China represent a threat to US National Security.
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