BYD and Geely are among the three finalists bidding for a Nissan-Mercedes-Benz joint venture plant in Aguascalientes, Mexico, with an annual capacity of 230,000 vehicles. This acquisition could provide Chinese EV makers a rapid North American manufacturing base, bypassing delays in new factory builds stalled by US and Mexican regulatory hurdles. For EV enthusiasts and investors, it signals intensifying competition in the region’s auto sector, potentially reshaping supply chains despite political tensions.
Background
The COMPAS plant in Aguascalientes, a $1 billion joint venture between Daimler (Mercedes-Benz) and the Renault-Nissan Alliance opened in 2017, currently produces the Infiniti QX50, QX55, and Mercedes-Benz GLB. Mercedes is exiting due to the end of GLB production, while Nissan is closing it as part of a global restructuring that includes consolidating from 17 to 10 plants by fiscal 2027 after a $4.5 billion net loss in the year ending March 2025. Operations cease by May 2026.
BYD and Geely, both selling over 4 million vehicles annually, view Mexico as key despite challenges. Chinese brands hold about 9.4-10% of Mexico’s 1.5 million annual car market since entering in 2020. Mexico imposes 50% tariffs on Chinese vehicles without trade agreements, incentivizing local production. BYD’s prior $1 billion greenfield plans from 2023-2024 were halted by China’s Ministry of Commerce in March 2025 over tech leak concerns and Mexican delays under US pressure.
Key Plant Specifications
| Specification | Details |
|---|---|
| Location | Aguascalientes, Mexico |
| Annual Capacity | 230,000 vehicles |
| Current Models | Infiniti QX50/QX55, Mercedes-Benz GLB |
| Established | 2017 ($1 billion investment) |
| Closure Date | May 2026 |
| Finalists | BYD, Geely, VinFast (from 9 bidders) |
Bidding Dynamics
From nine interested parties including Chery and Great Wall Motor, BYD, Geely, and VinFast advanced. The plant offers immediate advantages: skilled workforce, supplier networks, infrastructure, and no Mexican government approval needed for ownership change, unlike new builds. Geely, owner of Volvo, Polestar, Lotus, and Zeekr, eyes US entry in 2-3 years; it’s discussed capacity sharing with Ford in Europe.
Geopolitical Tensions
Mexico faces US pressure under Trump, who accuses it of backdooring Chinese goods amid 25% tariffs that cut US exports from 2.8 of 4 million Mexican vehicles in 2024, costing 60,000 jobs in 2025. Mexico’s economy ministry urges stalling Chinese deals until US trade talks, ahead of USMCA review in July. Yet, auto sector woes make Chinese investment vital; officials lack power to block private sales.
Market Comparison
Compared to VinFast, which lacks BYD or Geely’s scale, the Chinese giants bring proven EV volume: BYD often tops Tesla globally, Geely matches Ford’s sales. Rivals like Tesla build from scratch in Mexico without such hurdles, but stalled Chinese greenfield projects highlight acquisition’s speed advantage. Local players face layoffs, e.g., 1,900 at GM’s Ramos Arizpe plant.
Verdict
This bid race positions BYD or Geely for North American dominance via an operational 230,000-unit plant, ideal for serving Mexico’s growing EV market and testing USMCA limits. It’s best for investors tracking EV expansion and policymakers balancing jobs against tariffs—though unanswered questions linger on winner announcement, retrofit costs, and US retaliation risks. Details on final sale terms not yet confirmed.
