TOKYO: BYD and Geely have been shortlisted to acquire a joint manufacturing facility operated by Nissan Motor Co. and Mercedes-Benz in Mexico, according to reports by Reuters and Nikkei. The potential deal could accelerate Chinese electric vehicle production in North America at a time when trade rules under the United States–Mexico–Canada Agreement (USMCA) are under review.
The development is significant for global automakers and investors because acquiring an existing plant may shorten production timelines compared with building a new factory. It also comes ahead of a scheduled USMCA review in July 2026, which could affect tariffs, regional content rules and export eligibility for vehicles assembled in Mexico.
Why the Mexico plant matters
The Nissan–Mercedes facility provides established assembly infrastructure, workforce capacity and supply-chain links. If BYD or Geely secures the plant, production could begin sooner than through greenfield construction, subject to regulatory approvals and supplier retooling.
Using an operational facility can reduce lead times for certification, tooling and workforce training. However, model approvals, compliance adjustments and local sourcing requirements would still need to be addressed before exports to the United States or other markets.
Neither Nissan nor Mercedes-Benz has announced a finalized agreement, and discussions remain ongoing.
USMCA review and trade considerations
The upcoming USMCA review is expected to revisit rules of origin, tariff treatment and regional content thresholds that affect electric vehicles produced in Mexico. Any changes could alter the cost competitiveness of exports to the US market.
Industry analysts note that battery sourcing, component content requirements and cross-border logistics will be central factors in determining the economic viability of expanded EV production in Mexico.
The review outcome could affect not only Chinese manufacturers but also Japanese and European automakers operating in North America.
Competitive implications in the EV market
A successful acquisition could strengthen BYD or Geely’s position in the North American electric vehicle segment, particularly in compact and entry-level models where pricing remains a key factor.
Also Read: BYD to Launch $150m EV Assembly Plant in Pakistan This Year
For Nissan, the potential sale may signal adjustments in manufacturing strategy and global footprint. The transaction may also influence supplier networks, logistics operators and parts manufacturers connected to Mexico-based production.
What to watch next
Key indicators include any exclusivity agreements, regulatory approvals in Mexico, supplier nominations and formal announcements from the companies involved. Market participants are also monitoring corporate earnings calls and policy updates tied to the USMCA review.
Until a final agreement is confirmed, the plant remains under its current ownership, with negotiations reportedly ongoing.
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