BYD and other Chinese car companies may turn to Latin America, and the U.S. market is no longer the first choice

According to reports, on August 16, 2022, the U.S. government signed the "Inflation Reduction Act (IRA)", which aims to promote the domestic electric vehicle manufacturing industry in the United States through tax incentives and financial support and exclude China from the electric vehicle industry in the United States. Outside the automotive supply chain. The signing of the bill makes it expensive and inappropriate for BYD to operate in the U.S. passenger car market. Therefore, BYD Executive Vice President Li Kezen said that the IRA may slow down the penetration rate of electric vehicles in the United States and prevent American consumers from purchasing the most "affordable" options, so the U.S. market is not within BYD's current consideration.

However, Chinese car companies have not given up on expanding overseas markets. In recent years, Chinese car companies have established factories in places such as Mexico and Brazil, mainly targeting the smaller, profitable and easy-to-enter Latin American markets. BYD is expected to select a location to build the factory before the end of the year, and the factory's production capacity will reach 150,000 vehicles per year. In addition, BYD has launched a variety of passenger car products and bus and chassis products in the Mexican market.

BYD’s cash reserves have continued to grow over the past few years, increasing eightfold by the end of 2021. At the same time, BYD can make a net profit of about 9,000 yuan for each car sold. This improved financial position provides it with more funds and resources to support its overseas expansion plans.

According to reports, Kia expects to start producing electric vehicles in the United States this year to obtain partial electric vehicle tax credits. This shows that when facing international trade policies and regulations, companies in different countries and regions may have different response strategies and choices. South Korean automaker Kia chose to compromise with the United States and produce in the United States to obtain tax benefits.

The above is the detailed content of BYD and other Chinese car companies may turn to Latin America, and the U.S. market is no longer the first choice. For more information, please follow other related articles on the PHP Chinese website!