Hong Kong-listed BYD Co. Limited (HK:1211) is seeking state incentives in Mexico as it searches for potential locations for its new EV plant. Jorge Vallejo, BYD’s Mexico head, stated that the company is considering three states and evaluating the incentives offered by each. He added that these states are offering a range of benefits, including financial support, land, and pricing options.
Headquartered in China, BYD Co. is a global manufacturer of EVs and batteries.
More Details on BYD’s Mexico Plant
The upcoming Mexico plant is expected to produce 150,000 units in its first phase and another 150,000 units in the second phase. It has plans to reach a total production of between 400,000 and 500,000 units in the coming years.
Vallejo further clarified that the plant will focus on the Mexican market, with no immediate plans to enter the U.S. market.
BYD’s Proclaims Global Aspirations
Since last year, Chinese carmakers like BYD have ramped up their efforts in global expansion, leveraging their advanced technology. Additionally, BYD is looking to reduce its dependency on the Chinese market, which is flooded with EVs. The company is also concerned about declining sales in China due to economic downturns, affecting consumer confidence in high-end purchases.
Globally, the tariffs from the European Union and the U.S. pose a significant challenge to the company’s international ambitions. These tariffs target the low prices of Chinese-made EV imports.
Even Canada is considering restrictions on the import of vehicles from Asian carmakers. Despite this, BYD is eyeing the Canadian passenger vehicle market, according to a regulatory document filed in July. The company already operates an electric bus plant in Canada.
In July, BYD launched its first EV factory in Southeast Asia to capitalize on the region’s growing EV market.
Currently, BYD’s new energy vehicles are available in 88 countries and regions, with production facilities for passenger cars in Thailand, Brazil, Hungary, and Uzbekistan.
Is BYD a Good Stock to Buy Now?
According to TipRanks, 1211 stock has received a Strong Buy rating, backed by all Buy recommendations from eight analysts. The BYD Co. share price target is HK$337.07, which implies an upside of about 50% from the current trading level.
