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China's MG Motor Is Conquering Europe. Now It Wants To Build A Factory In Mexico

While the U.S. continues to restrict Chinese electric vehicles from entering its market, its neighbors are increasingly embracing affordable and well-made Chinese EVs.

The latest brand to show interest in capitalizing on the growing Latin American EV market is MG Motor. The former British brand is owned by China’s state-owned SAIC Motor, and it now plans to establish a manufacturing facility and a research and development center in Mexico.

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The threat of the Mexico backdoor.

U.S. automakers fear that cheap and well-made Chinese EVs, which are already flooding Mexico, could also enter the U.S. if those brands set-up plants in the country. While U.S. could be a lucrative market for them, it is not the only country they're interested in. They see incomes rising in South America and Latin America as well, where they plan to expand regardless of America's protectionist policies. 

By expanding further into Mexico, where it already sells models like the all-electric MG4 and the MG3 hybrid, it would be able to "not only produce vehicles, but to also produce market intelligence specifically designed for and by Latin America," country lead Zhang Wei said in a statement.

The automaker said the Mexico plant, whose construction time and location details weren’t revealed, would help the SAIC Group grow and expand into the Caribbean and Latin America. The expansion would also allow MG Motor to launch its luxury brand, IM, in these markets, something the automaker said is on the cards.

MG Motor already has plants in China, Thailand and India. Plus it's planning to build a factory in Europe, where it is the best-selling Chinese brand with nearly 128,000 units sold in the first half of 2024, as per Dataforce numbers reported by Automotive News.

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Mexico is emerging as the hotspot in North America for Chinese EVs. Brands like BYD and Chery Automobile already sell cars in the country. Reuters reported that one in 10 cars sold in Mexico last year were Chinese. Given the pace of Chinese investments in the country, that share will likely continue to grow.

Tesla also plans to build a factory in Mexico, but those plans are on pause as the company awaits the outcome of the presidential elections in November.

If Donald Trump gets elected, it would certainly hurt the U.S. auto industry. He has vowed to amend the U.S. Mexico Canada (USMCA) free trade agreement and slap 100-200% tariffs on cars made in Mexico. A ton of cars sold in the U.S. are made in Mexico, including those from General Motors, Ford, Mazda, Nissan, BMW and countless others.

Those cars should be made in the U.S., he said at the Republican National Convention, implying that he would allow Chinese carmakers to build factories in the U.S. Mexico, however, recently indicated that it was distancing itself from Chinese brands and had reportedly halted talks with BYD after pressure from the U.S.

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