Weathering the storm
Updates on the world's biggest EV maker in Mexico, plus what I'm reading
Welcome to The Mexpatriate.
Hurricane Erick, the first major hurricane of the Pacific season, approached the Oaxaca coast as a category 4 storm, but made landfall as category 3 early Thursday morning about 139 kilometers north of Puerto Escondido. As of writing, no deaths have been reported but torrential rains continue to pummel both Oaxaca and Guerrero, and President Sheinbaum reported on material damages and road closures this afternoon.
The federal government deployed 30,000 members of the army and navy to the coastal area, which was devastated by Hurricane Otis in Acapulco in October 2023 and Tropical Storm John in September 2024. The Pacific hurricane season is expected to be below-normal this year according to the NOAA, with stronger activity in the Atlantic.
In today’s newsletter, I cover the latest developments on Chinese carmaker BYD in Mexico, plus what I’m reading.
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BYD in Mexico: Dreams on hold?
On June 10, Liverpool announced the decision to terminate its deal as a distributor for Chinese carmaker BYD (Build Your Dreams) in Mexico. The department store chain made an agreement with BYD when the brand first arrived in the country in November 2022, and last year sold 4,384 units. This represents about 10% of all BYD sales in Mexico in 2024, but is far below Liverpool’s initial projections of up to 17,000 vehicles in 2023.
In a press release, Liverpool said it planned to “keep strengthening our commercial offer and focus on the areas that bring the most value to our customers” while promising an “orderly” transition to another distributor.
The decision by Liverpool likely wasn’t just motivated by slower than expected sales, but also by concern about tariffs. As summarized by a stocks analyst at Valmex quoted in El País:
“We think the management of Liverpool may have taken additional factors into account, such as the interest in reducing risk related to changes in U.S. policy; not just in their country, but also considering the ongoing pressure on the Mexican government and on North America as a region to reduce Chinese imports. I think this was a factor they took into consideration.”
BYD México currently operates 50 of its own dealership locations, and has plans to open 30 more this year (including in Mazatlán, Puerto Vallarta and here in San Miguel de Allende). The world’s biggest maker of electric vehicles (EVs) has grown quickly since it started selling in Mexico two years ago. BYD reported sales of 40,000 hybrid and electric vehicles in the country last year, which would make it the tenth biggest brand on the Mexican market, on par with Suzuki and Hyundai in volume. The company is also well ahead of other Chinese car brands in Mexico—the closest competitors in 2024 were JAC (24,826) and Chirey (20,442). Last October, the company’s general director in Mexico, Jorge Vallejo, projected sales of 50,000 units in 2024 and 100,000 units in 2025.
The hybrid and EV market is still small in Mexico, but sales grew 25% annually in the January-May period this year and accounted for 9.2% of all national car sales.
BYD also made a splash (and sparked concern up north) in late 2023 when it announced plans to build a manufacturing plant capable of churning out 150,000 vehicles a year—claimed to be for the domestic market—and generating 10,000 jobs in Mexico.
However, the Financial Times reported in March that the Chinese government had delayed approval of BYD’s plant over fears that the company’s technology would be leaked to the United States—apparently, Mexico is feared as a “backdoor” into the U.S. by China as well. A source cited in the article also said that the Sheinbaum government had adopted a “hostile attitude towards Chinese companies” that further cooled BYD’s ambitions. When questioned about the report, Sheinbaum said that the Chinese company’s plan to invest in the plant “was never formal.”
In less widely reported news, one of BYD’s four cargo ships made its first call in Mexican ports this week. The 200-meter long ship delivered a total of 5,500 vehicles in Mazatlán and Lázaro Cárdenas—according to BYD México, the Changzhou’s arrival “reaffirms the company’s commitment to strengthening its presence across the country and bringing electric mobility to more regions of Mexico.”
What I’m reading
How smuggled US fuel funds Mexico’s cartels (Financial Times)
This is a highly detailed, eye-opening investigation into cross-border fuel smuggling and how massive a black market it has become in Mexico. According to the report, it could make up anywhere from 16 and 27 percent of the country’s annual consumption of gas and diesel. Just today, authorities reported seizing an illegal “mini-refinery” in Coatzacoalcos, Veracruz and over 500,000 liters of crude were seized.
Mexico says construction on three dams in Sonora will begin in July. Locals are concerned. (The Border Chronicle)
In the face of ongoing water scarcity, locals are petitioning the federal government for answers about dams that Conagua plans to start building on the Río Sonora in July—but the environmental and hydrologic studies are still in process. “There’s no water. What good are three empty dams?” wonders one specialist consulted in the report.
“It really is possible to be zero waste”: The restaurant with no bin (The Guardian)
An admiring review of Baldío, Mexico’s first zero-waste restaurant located in Condesa and supplied by chinampas in Xochimilco (you can read more about it in my recent interview with Lydia Carey). The UN reports that one-fifth of food is lost or wasted globally, and as chef and Baldío co-founder Doug McMaster, who opened the first no-bin restaurant in London in 2014 says: “If there was a trophy for negligence, it would be bin-shaped.”
“La mesa herida de Frida Kahlo es el Santo Grial del mundo moderno” (Milenio)
Researcher and documentary filmmaker Miguel Gleason tells Milenio about a clue he’s found in the search for a Frida Kahlo painting that disappeared 70 years ago, which he describes as a “holy grail” in the modern world (he estimates it is worth US $40-$50 million). “La mesa herida” or “The wounded table” was donated to the Soviet Union by Kahlo in 1947 and last seen in 1955 in Varsovia, Poland.
Thank you for reading and feel free to send me your suggestions, comments and questions at hola@themexpatriate.com. And please share The Mexpatriate!
Great information, thank you. I was wondering what was happening w/ BYD and MX. Also, the Frida painting mystery is super interesting.
Muy bueno y las recomendaciones!