BYD and Geely Bid for Nissan’s Mexico Plant, Testing Washington’s Red Lines on Chinese Manufacturing

Two of China’s largest automakers, BYD and Geely, are among the finalists vying to purchase a Nissan–Mercedes-Benz joint venture plant in central Mexico, according to Reuters, in what would give either company an instant manufacturing foothold in North America. Vietnamese EV maker VinFast is the third finalist. The three were selected from nine companies that expressed interest, which also included Chinese automakers Chery and Great Wall Motor.

The COMPAS factory in Aguascalientes — a $1 billion facility opened in 2017 with capacity for 230,000 vehicles annually — is closing on May 31, 2026. Mercedes is relocating GLB production to Hungary, where tariff rates for US-bound exports are lower. Nissan is discontinuing the Infiniti models assembled there as part of a global restructuring that will reduce its plant count from 17 to 10. At peak operations, the facility employed around 3,600 workers. No Mexican government approval is needed for the transaction, and Beijing’s Commerce Ministry has reportedly not raised objections.

For BYD, the bid marks a strategic pivot. The company spent years pursuing a greenfield factory in Mexico, with plans dating to 2023 for a facility producing up to 150,000 vehicles. Those efforts stalled on two fronts: China’s Commerce Ministry delayed approval in early 2025, citing fears that BYD’s proprietary smart-vehicle technology could leak to US competitors, while Mexico’s economy ministry quietly urged states to freeze Chinese automotive investments ahead of trade talks with Washington.

The geopolitical tension is acute. Trump‘s 25% tariffs on Mexican-made vehicles, imposed in March 2025, have battered an industry that sent 2.8 million of the 4 million cars it produced in 2024 to American buyers. Mexico lost roughly 60,000 auto jobs last year. Simultaneously, Mexico’s own 50% tariff on vehicles from countries without a trade agreement — including China — incentivizes local production over imports. Chinese automakers went from zero Mexican market share in 2020 to approximately 10% by 2025, according to AutoForecast Solutions.

BYD and Geely each sold more than 4 million vehicles globally last year, roughly matching Ford’s volume. Both see Mexico not as a backdoor to the US but as a base for Latin America’s largest markets. The Aguascalientes state government confirmed the interested companies are focused on producing for Mexico and Latin America, not US export. But a Chinese-owned auto plant 500 miles from the Texas border will test whether Washington’s objections are about trade flows or geography. The USMCA review, scheduled for July, will be the first arena for that fight.

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