by Mexico Considers High Tariffs on Vehicle Imports
Mexico is discussing the introduction of new high duties that could radically change the country’s automobile market. A 50-percent duty on vehicles imported from countries with which Mexico does not have free trade agreements is being proposed. This applies, in particular, to China, which could significantly impact the rapidly growing manufacturer BYD and even affect Tesla, as electric vehicle sales in Mexico are gaining momentum.
Proposal Details and Consequences
The proposed tariffs will apply not only to electric vehicles but also to vehicles with internal combustion engines imported from countries without trade agreements. These include South Korea, China, India, Indonesia, and Russia. American brands such as General Motors, Ford, and Stellantis will avoid the new duties due to the presence of production facilities in Mexico.
Eugenio Grandio, President of the Mexican Association of Electromobility, noted: “This will undoubtedly change the rules of the game. Fifty percent is a very aggressive figure.”
Impact on BYD and Tesla
Analysts believe the new duties could slow down BYD’s rapid growth in Mexico. Although the company planned to build a plant in the country, these plans were canceled due to pressure from the Mexican authorities, who feared a deterioration in trade relations with the US. Despite this, BYD sold about 40,000 vehicles in Mexico last year, accounting for almost half of all electric and hybrid vehicle sales.
Tesla’s Position and Possible Solutions
Tesla currently relies on shipments from Shanghai for the Mexican market. However, the company has inventories that allow it to redistribute supplies from other plants, including American ones. This could help avoid serious losses from the new tariffs.
The introduction of tariffs may promote the development of local production but will simultaneously slow down the penetration of Chinese brands that offer affordable electric vehicles. It could also affect the overall market dynamics, as consumers will face price increases. Mexico is thus trying to find a balance between protecting national interests and supporting competition.
