Chinese automotive giants BYD and Geely are locked in a high-stakes contest to acquire a major vehicle assembly plant in Aguascalientes, Mexico, formerly operated by Nissan and Mercedes-Benz. The move signals a bold push into North American manufacturing as global trade tensions rise and supply chains for electric vehicles continue to shift.
The facility, once central to the production of premium models for both automakers, has come up for sale as part of Nissan’s broader restructuring and Mercedes-Benz’s strategic withdrawal from some joint ventures to concentrate on core markets. The bidding, reported on February 13, 2026, highlights how aggressively Chinese manufacturers are expanding abroad, using Mexico’s favorable trade position under the USMCA to sidestep tariffs and gain direct access to the U.S. market.
Analysts say that whichever company wins the plant could gain a significant foothold in North America’s EV and hybrid manufacturing landscape, potentially intensifying competition with entrenched players like Tesla and General Motors. The facility would provide a ready-made production base to scale up quickly, a clear advantage in a market where speed to market and cost efficiency are increasingly critical.
Though executives from BYD and Geely have not commented publicly, the battle for the plant reflects a broader trend: Chinese automakers snapping up Western assets amid slowing growth at home. The strategic importance of this acquisition is amplified by recent U.S. policy shifts under the Trump administration, including the rollback of EV incentives and emissions regulations. These changes have unintentionally made low-cost, high-volume production strategies more appealing, especially for Chinese firms looking to undercut traditional OEMs.
The outcome could reshape Mexico’s already globalized auto sector, long dominated by foreign manufacturers. It also raises questions about the long-term impact on local employment, supplier networks, and potential technology transfers.
This development comes against a backdrop of significant moves across the industry. Rivian recently posted its first profit swing thanks to a joint venture with Volkswagen, while Mercedes-Benz has seen profits halved in 2025 due to sluggish EV demand. Still, the BYD-Geely race stands out for its immediacy and the clear strategic stakes involved. This isn’t just about buying a factory. It’s about securing a launchpad into one of the most competitive automotive markets in the world.
