China is facing delays in approving BYD and Geely to produce cars in Latin America due to trade and economic uncertainties fueled by US tariffs, as reported by Reuters. The Chinese government has become more cautious about overseas investments by Chinese automakers, leading to stricter scrutiny of such projects.
In February 2024, a BYD Mexico executive mentioned the company’s plans to establish an electric vehicle (EV) plant in Mexico. Similarly, Geely announced a collaboration with Renault in Brazil for the production of low-emission vehicles in February this year.
However, the approval process for both projects has taken longer than expected, with Chinese state planners expressing concerns about potential technology transfer risks associated with the projects. The officials also highlighted the uncertainties created by US President Donald Trump’s tariffs, complicating the risks and returns of investments in the region.
Despite the increased scrutiny, Chinese authorities have not completely halted the acceptance of applications from automakers for overseas investments. The review process has been extended, with companies being asked to submit additional materials for evaluation.
Geely reported that its cooperation with Renault in Brazil has been successful, with no delays or extra scrutiny. The company’s EVs were launched locally just 52 days after the agreement was signed, showcasing the efficiency of the collaboration.
On the other hand, BYD was expected to announce the location of its first plant in Mexico by the end of 2024. The plant is planned to produce 150,000 vehicles in the first phase and an additional 150,000 in the second phase. However, delays in approval were reported in March 2025, citing concerns about potential technology leakage to the US.
Geely, on the other hand, has expanded its international footprint by launching the Geely EX5 in the Brazilian market and recently in Australia and New Zealand. The company’s partnership with Renault in Brazil aims to leverage localized production, sales, and service resources in the region.
Overall, Chinese automakers are facing challenges in expanding their operations in Latin America due to increased scrutiny and uncertainties in the global trade environment. Despite these obstacles, companies like BYD and Geely are pushing forward with their plans to establish a presence in the region.
