China halts BYD's Mexico factory plans as US automakers like Tesla may steal its EV technologies

China is worried that the superior electric vehicle technologies of BYD, the world's largest EV maker, could be lifted by US automakers if it goes ahead with its Mexican factory plans.

BYD wants to invest $1 billion in a new plant there that would make 150,000 vehicles a year, but those plans were announced in 2023 when the tariff war of the current White House administration was yet to materialize.

While BYD recently said that it considers Tesla an ally in the common battle against the ICE vehicle, and is willing to share its technology, the Chinese government is of a different opinion. It has reportedly told BYD to pause its Mexican factory plans pending their review on national security grounds that involves the potential for industrial espionage by the US.

Not only would importing components or materials to Mexico become more expensive with the new tariffs now, but there is also a big risk that the "proximity to the US" will help American competition like Tesla take advantage of BYD's superior technologies, think government officials.

BYD just announced its new 1MW EV powertrain architecture that allows for 5-minute charging speeds, for instance, as well as for a unique 580 kW motor that fits in the same footprint, and a 10C battery to back that powertrain up.

Its Tesla FSD autonomous driving system competitor called God's Eye is also coming for free with all of its electric vehicles, including the cheapest ones, while Tesla charges $8,000 for it.

"The commerce ministry’s biggest concern is Mexico’s proximity to the US," said one government insider. Apparently, it is now China's turn to worry that the superior electric vehicle and battery technologies it has been investing in for more than a decade, could get in the hands of US automakers like Tesla or GM.

A big part of their supply chain is located in Mexico, too, and that extensive network created over the years could very well be used for industrial espionage, according to the Chinese government.

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