Tesla and BYD are set to face significant setbacks from Mexico’s proposed 50% tariff on electric vehicles (EVs) imported from China. The tariff, announced on September 12, 2025, would impact the fast-growing Mexican electric vehicle market, with both companies bearing the brunt of the impact. The tariff specifically targets EVs from countries like China, which don’t have a free trade agreement with Mexico, reports Reuters.
The new tariff would sharply affect BYD and Tesla, both of which rely heavily on Chinese manufacturing to offer affordable EVs. In 2024, BYD sold around 40,000 electric cars in Mexico, capturing nearly half of the country's EV market, while Tesla has been importing vehicles from its Shanghai factory. The tariff could increase vehicle prices, hurting their competitive edge.
Meanwhile, U.S. automakers—General Motors (GM), Ford, and Stellantis—will be largely spared by a 2003 decree that allows companies with production plants in Mexico to import vehicles tariff-free from non-FTA countries like China.
Both BYD and Tesla had ambitious plans to build factories in Mexico. However, these plans have been delayed or scrapped due to political and economic factors. BYD abandoned its factory project earlier this year, citing trade policy uncertainty, while Tesla suspended the construction of its massive planned factory in northern Mexico last year.
This tariff is expected to reshape the Mexican auto market, particularly for electric vehicles, and may open opportunities for U.S. car manufacturers to strengthen their position in the market. Analysts speculate that the U.S. could see greater competition with BYD and Tesla, whose growth in Mexico has been notable.
As the tariff proposal moves through Mexico’s Congress, the auto industry is watching closely to understand the broader impact on electric mobility and international trade.
Bd-pratidin English/ Jisan
