As the sun sets in Hermosillo, Sonora, a group of rideshare drivers gather, each with their sleek, compact BYD Dolphin Mini electric cars. Among them, Juan Navarro leans against his vehicle, a cigarette in hand, reflecting on the financial relief his new electric car offers. “The savings are big,” he notes, having slashed his daily fuel costs significantly since switching from gasoline.
While these Chinese electric vehicles are becoming a common sight on Mexican roads, they remain a rarity just across the U.S. border, where high tariffs and technology bans restrict their presence. This growing trend in Mexico is drawing the attention of U.S. policymakers, who are considering the implications for trade agreements with Mexico and Canada.
This issue is poised to influence future trade discussions under the United States-Mexico-Canada Agreement (USMCA). As these negotiations unfold, they will shape the future of Mexico’s burgeoning electric vehicle sector.
Navarro is one of many local drivers who have embraced the Dolphin Mini for rideshare purposes. The trend has caught on quickly since Fabián Morales became one of the first adopters in Hermosillo two years ago. “It’s growing really quickly,” Morales observed.
Chinese electric vehicles have gained a foothold worldwide, including in Mexico, where they enjoy success despite being nearly absent in the U.S., primarily due to trade barriers. In Hermosillo, a BYD dealership offers a range of affordable electric vehicles, including pickup trucks, SUVs, and sedans, outpricing many competitors.
Ilaria Mazzocco from the Center for Strategic and International Studies explained, “Chinese automakers have been really eager to find new markets.” She noted that Chinese manufacturers keep costs low through government subsidies and in-house production of components like batteries.
These imported vehicles have significantly contributed to Mexico’s electric vehicle infrastructure growth, with the state of Sonora unveiling its first public charging station in Hermosillo last year, complemented by solar-powered ports.
Despite their popularity in Mexico, these vehicles face resistance from other global manufacturers who struggle to compete on price. “The U.S. is certainly not offering an alternative here,” Mazzocco stated.
The U.S. government is wary of the growing Chinese presence in Mexico and Latin America, particularly concerning vehicles with “connected” technology that could potentially transmit user data. These concerns are anticipated to feature prominently in the USMCA trade review.
Mexico’s position is delicate, caught between U.S. expectations and its economic ties with China. In response, Mexico has imposed significant tariffs on Chinese cars, which also serve to protect its domestic manufacturing industry. “The auto sector is one of Mexico’s largest employers,” said Jorge Guajardo, former Mexican ambassador to China. He emphasized the risk to local manufacturing from the influx of Chinese vehicles.
The current 50% tariffs on Chinese and other Asian cars without a free trade agreement with Mexico are seen as a “good first step” by Guajardo. However, he warns that further tariffs may be necessary as Chinese vehicles are priced so competitively. “It is basically impossible to compete with the Chinese on price, so it puts everyone else at a disadvantage,” he said.
For the Dolphin Mini drivers, the focus remains on the benefits of their vehicles rather than tariffs. Fernando Vargas, a new owner, is experiencing increased earnings, as electric charging costs are lower than fuel, making his rideshare job more profitable.
Despite the economic and political challenges, the drivers agree that China is fulfilling a need unmet by the U.S. “I feel like they’re more advanced than the United States,” Navarro commented. However, the group acknowledges that the cars face a different adversary: the local roads. “They’re really cool and all, but they’re not made for the streets of Hermosillo,” Morales quipped, citing the potholes that wear down their tires.
