【Editor's Note】

As one of the co-organizers of the 33rd Gerpisa International Forum on the Global Automotive Industry, Xuanyuan Academy interviewed more than a dozen participating experts, all from countries and regions where Chinese automobile exports are currently popular. On the one hand, through their perspectives, we can understand the development status of China's automobile industry in their respective countries and regions; on the other hand, we also invite these outstanding global automotive experts to offer suggestions on how Chinese automobiles can develop steadily in the local market.

The expert interviewed today is Adriana Martinez, a professor and researcher at the National Autonomous University of Mexico. She holds a PhD in social studies and focuses on innovation, industrial transformation, and sustainable travel research. Its research focuses on the development of the automotive industry, the dual transformation of digitalization and sustainability, Industry 4.0, and innovation ecosystems, with a particular emphasis on Latin America.

She has conducted empirical research on the strategies of companies such as Toyota and GKN in Mexico, published multiple related papers and articles, and is also the founder and editor in chief of the journal Entreciencias.

Dr. Adriana also frequently participates in academic and industry conferences in multiple countries. Recently, she has researched and explored the interaction between digitalization, electrification, and industrial policies in the global automotive industry, focusing on the evolution of Mexico's role in the North American and Latin American supply chains.

The following is a transcript of her interview. (with some deletions)

01 Use one word to comment on the globalisation of Chinese auto companies and their brands. What will that be?

"Strategic."

I would say "strategic" because what we're witnessing is not just a fast-paced global expansion, but one that is deeply calculated and transformative. Chinese automakers like BYD are not following traditional export models — they are redefining the rules of the game.

They're investing heavily in R&D — BYD alone has more than 120,000 people working in research and development — and they're building localized production hubs, forming smart alliances, and adapting quickly to different market regulations. This shows not only scale, but intention.

One great example of strategic leadership is Stella Li, Executive VP and President of BYD Americas, who's been with the company since 1996. Her role has been essential in shaping BYD's brand and operations across Latin America and the U.S.

So yes — it's strategic, but also transformative in how it's reshaping the global industry.

02 In your country, do you believe that the globalisation strategy of Chinese auto companies is a long-termism thinking?

Absolutely — and Mexico is a great example of that.

Chinese automakers are not just entering the Mexican market to sell cars — they are building a long-term industrial and strategic presence. One of the earliest signals was JAC Motors, which has been assembling vehicles in Ciudad Sahagún, Hidalgo, since 2017, through a joint venture with Giant Motors. That project has grown steadily and illustrates a model based on local integration.

More recently, BYD announced plans to build its own plant in Mexico* — this would be the first fully Chinese-owned auto manufacturing facility in the country, and a very clear sign of long-term commitment. These moves are not just about market opportunity; they're also strategic responses to USMCA rules, and they reflect how Mexico is being positioned as a regional export hub for North and Latin America.

(* Editor's note: The interview was conducted on June 23, and at that time, the plans announced by BYD to build a factory in Mexico were still in place. However, on July 2, it was publicly announced that the project was canceled, mainly due to geopolitical tensions, particularly the renewed trade policy pressures from the United States under the influence of Donald Trump.   —— Dra. Adriana Martínez.)

Additionally, Chinese companies are investing in areas that require long-term vision: electromobility, charging infrastructure, supply chains, technical education, and after-sales networks. These are not short-term bets — they involve building capabilities, transferring technology, and relying on local talent.

So yes, their approach in Mexico reflects long-termism in every sense: industrial, technological, and geopolitical.

03 What kind of image do you think the Chinese auto companies should shape in their globalisation strategy?

I think Chinese auto companies have a unique opportunity right now to shape a brand image that goes far beyond the old perception of "low cost." That narrative is outdated. What they need to emphasize now is a combination of innovation, trust, sustainability, and local engagement.

Take BYD, for example. They're already recognized as a global leader in electric mobility and have made massive investments in R&D, design, and autonomous driving. But technology alone isn't enough. To build real global trust, they need to be seen as partners — not just exporters.

That means investing in local talent, collaborating with universities and research centers, and contributing to community development. These actions shape a brand that feels not only advanced but embedded and respectful of local ecosystems.

Also, showcasing diverse leadership can help differentiate them. For instance, Stella Li, BYD's Executive VP and President of BYD Americas, brings visibility to a more inclusive and modern image — something that resonates especially in Western markets.

In short, Chinese automakers should aim to be perceived as innovative, premium, sustainable, and trustworthy — global in ambition, but locally grounded. That's the image that will open doors in the most competitive markets.

04 How should Chinese automakers dynamically adjust local content rates amid policy fluctuations? Is building a factory in Mexico still a good choice?

Mexico is still a highly strategic location — but it's no longer a "simple" choice, especially for Chinese automakers. On paper, building a factory here makes sense because of the USMCA: if you meet the 75% regional content requirement, you can export to the U.S. and Canada tariff-free. But in practice, the landscape is more complex.

There are growing geopolitical tensions. Even if Chinese companies comply with local content rules, there are concerns in the U.S. around batteries, electronics, and components linked to Chinese firms. That creates non-tariff barriers that go beyond trade agreements — and they're very real.

That said, building in Mexico still offers major advantages. The country has a robust supply chain, qualified labor, and mature industrial clusters in regions like Guanajuato, Puebla, and Coahuila. And beyond North America, Mexico can serve as a launchpad into Latin American markets, which are growing and less politically sensitive.

To navigate this evolving landscape, Chinese automakers need to be flexible and politically aware. Since Donald Trump returned to the U.S. presidency in January 2025, the administration has implemented new tariff policies — including a 25% tariff on vehicles and auto parts that fail to meet USMCA content rules, and the so-called "Liberation Day" strategy, which adds baseline tariffs on global imports.

Given this shift, it's essential to closely monitor U.S. policy developments from April 2025 onward, and to adjust investment timing and production strategies in Mexico dynamically. This includes exploring diversified export destinations, investing in regional supply chains, and ensuring deep compliance with content and origin requirements

In short, Mexico is still a viable but high-stakes option. Success will depend on agile localization strategies, risk management, and a long-term commitment to regional integration — not just focusing on the U.S., but viewing Mexico as a multi-market platform.

05 In Mexico, which model is more risk-resistant: wholly-owned ventures or joint ventures with local enterprises? Can they meet North America's local content rate requirements?

In the current context, joint ventures tend to offer greater risk resilience—especially in the early stages of market entry. They allow Chinese automakers to share regulatory burdens, navigate local dynamics, and tap into existing supply chains. This is particularly useful when dealing with complex rules like the USMCA’s 75% regional content requirement.

As I mentioned earlier, JAC Motors partnered with Giant Motors in Mexico, and that alliance became a useful model for quickly aligning with labor standards, supply networks, and regulatory expectations.

On the other hand, wholly-owned plants—like the one BYD is reportedly planning—can offer more control and long-term efficiency. But they also carry higher geopolitical risk, especially under increased U.S. scrutiny around Chinese-origin components and national security concerns.

When it comes to meeting USMCA content rules, both models can work—but with different strategies. Joint ventures often have a head start, thanks to local partners with established sourcing relationships. Wholly-owned plants require deeper localization, especially for key components like batteries, steel, and electronics, which takes more time and investment.

So in summary: joint ventures offer political and operational agility at the entry stage, while wholly-owned ventures may become more advantageous over time. A hybrid strategy—starting with a JV and evolving toward greater ownership—could be the smartest long-term path.

06 What issues need attention in the strategy of "Mexican localization + radiating Latin America"? How can the Mexico–Argentina free trade agreement be leveraged to reduce supply chain costs?

The strategy of using Mexico as a regional hub to serve Latin America is smart — but it's not automatic. It needs precise execution and awareness of several key challenges.

First, logistics and infrastructure across Latin America remain uneven. Moving vehicles or components from Mexico to countries like Argentina or Brazil is often complicated by port congestion, limited rail connectivity, and fragmented regulations. These issues are even more critical when dealing with electric vehicles, as battery transport and certification standards vary significantly by country.

Second, harmonizing technical regulations is a major challenge. Emissions or safety standards in Argentina may differ from those in Colombia or Chile. This requires companies to develop flexible production systems and invest in regional compliance teams.

The good news is that Mexico's trade architecture offers real advantages. The Mexico–Argentina Free Trade Agreement (ACE 55) allows for duty-free exports of light vehicles and parts under annual quotas that increase over time. Chinese automakers could assemble vehicles in Mexico using regional inputs — such as lithium or auto parts from Argentina — and export under this framework, significantly reducing logistics and tariff costs.

Another strategic advantage is the potential to leverage industrial clusters in Mexico beyond the typical tech hubs. For example, Guanajuato hosts a strong automotive cluster (CLAUGTO) and an emerging clean energy cluster. These ecosystems connect local suppliers, universities, and public–private initiatives, helping companies build local supply chains, integrate innovation, and respond more effectively to regional demands.

In summary: the "localization in Mexico + Latin American expansion" strategy holds great promise, but it requires investment in logistics, regulatory alignment, and regional sourcing. The Mexico–Argentina agreement offers a powerful mechanism to reduce costs — especially when paired with smart content strategies and cross-border supply chain design. Long-term success will depend on how well automakers connect Mexico's industrial capacity with South America's resource base and consumer demand.

07 Both the U.S. and Mexico have proposed exchanging Chinese battery patents. Are there alternative pathways, such as joint R&D with local universities or enterprises, to break through cooperation barriers?

Absolutely — and in fact, joint R&D and co-innovation models are not just viable alternatives, but potentially superior strategies for overcoming intellectual property barriers, especially in sensitive areas like batteries.

Given the current political sensitivity surrounding Chinese battery patents — particularly under the Trump administration — co-developing technologies with local universities and research centers in Mexico offers a more collaborative and politically resilient pathway.

Institutions like UNAM, CINVESTAV, Tec de Monterrey, and the University of Guanajuato are already conducting cutting-edge research on lithium, energy storage, and sustainable mobility. These are natural partners for Chinese companies looking to build trust, generate shared Intelectual Property, and reduce dependence on contested patents.

But the opportunity goes beyond academia. In regions like Guanajuato, we're seeing the emergence of innovation clusters driven by the energy and automotive sectors. These ecosystems enable deep collaboration among governments, universities, and industry. Chinese firms can play an active role here — not just as investors, but as knowledge partners helping to develop localized technologies and long-term industrial capacity.

Another powerful idea is to explore tiered licensing or modular innovation platforms — where non-core technologies like battery recycling or thermal management systems are co-developed under open IP frameworks, while more sensitive components remain under controlled, regional licensing. This kind of trust-based, flexible Intellectual Property model allows progress without compromising proprietary knowledge.

In short, joint R&D isn't just an alternative — it's a strategic solution that aligns with Mexico's industrial development goals, fosters local talent, and reduces political risk for Chinese firms. It turns competition into collaboration — and that's exactly what the current geopolitical moment demands

08 There is a view that U.S. automakers are strategically shrinking in the North American market to maintain high profits, but are losing competitiveness in other regional markets, especially in the electric vehicle market. How do you view the strategic decisions of U.S. automakers? What kind of competitive landscape will emerge between U.S. and Chinese automakers in the global market in the future?

That’s a very insightful observation, and it highlights a clear divergence in strategic priorities.

U.S. automakers have increasingly focused on margins rather than market share, especially in trucks, SUVs, and premium models within North America. This profit-over-presence strategy has delivered short-term returns — but it's also left significant gaps in many global regions, particularly in the electric vehicle segment.

Meanwhile, Chinese automakers are moving aggressively to fill those gaps.

Brands like BYD, XPENG, and Geely aren't just offering affordable EVs — they're also investing in local supply chains, charging infrastructure, and customer ecosystems across Latin America, Southeast Asia, and even parts of Europe.

So, what we're seeing is the emergence of a dual competitive landscape:

In the short term, U.S. firms will likely remain strong in North America, protected by tariffs and brand loyalty. But globally, Chinese companies are expanding rapidly — especially in cost-sensitive and tech-driven markets.

Technological innovation will be key. Chinese firms are making major advances in battery tech, charging solutions, and semiconductors, aiming for vertical integration by 2026. If U.S. automakers don't speed up innovation — particularly in EV platforms and smart mobility — they risk falling behind, even in their home markets.

While Trump's return has introduced new protectionist measures, giving U.S. companies some short-term shelter, the real risk is long-term:

If they don't adapt and expand globally, they may lose competitiveness to more agile and tech-driven Chinese rivals.

So, this decade will be critical. It may define whether the U.S. industry stages a balanced recovery — or whether we see a reshaping of global leadership, increasingly led by Chinese automakers.

09 Ford has achieved certain success by using China as a production base, covering markets such as ASEAN and Australia. Is this model worth learning from and promoting by other automakers?

Yes — but with important conditions. Ford's strategy of using China as a manufacturing base to serve external markets like ASEAN and Australia has been successful in terms of cost efficiency, production scale, and time-to-market. By relying on China's strong supplier base and advanced battery manufacturing capabilities, Ford was able to offer affordable electric vehicles to fast-growing, price-sensitive regions.

However, the geopolitical landscape has shifted significantly. Since the return of Donald Trump to the U.S. presidency in 2025, new tariffs and trade restrictions have introduced greater uncertainty into global supply chains. This has made Ford's model more politically sensitive and less predictable than in the past.

Still, there are useful takeaways. One is the value of hybrid production strategies — where initial component manufacturing happens in China, but final assembly and regulatory compliance are handled in or near the target market. Another is capital efficiency, as Ford demonstrated through joint ventures like its partnership with JMC, which reduced costs and increased local responsiveness.

For automakers today, the Ford model remains relevant, especially for reaching emerging markets or regions covered by favorable trade agreements. But it needs to be adapted: companies should diversify production bases — looking at countries like Mexico, India, or Southeast Asia — to better manage geopolitical risks.

In short, Ford's model offers valuable lessons, but replicating it blindly is no longer viable. Future success depends on how flexibly and regionally companies apply it in today's volatile global environment.

10 Tesla has seized the first-mover advantage in electric vehicles but is now facing more competitive products in various regional markets. How do you view Tesla's subsequent development?

Tesla, on the one hand, redefined the global automotive industry. It transformed electric vehicles from niche, eco-friendly products into aspirational, high-performance innovations. That first-mover advantage allowed Tesla to dominate the EV market for years. But as we know, being first doesn't guarantee staying ahead — especially in an innovation-driven sector evolving at high speed.

Today, Tesla faces intense competition from both traditional automakers like Ford and GM, and from Chinese brands such as BYD, XPeng, and NIO. These companies are offering highly competitive EVs with excellent performance, advanced features, and increasingly affordable prices.

Tesla still holds major advantages: brand power, strong vertical integration, and cutting-edge investments in battery technology — like the 4680 cells — autonomous driving, and robotics. Its global manufacturing footprint, with plants in the U.S., China, and Europe, also gives it logistical strength. And if Tesla successfully launches its $25,000 EV, it could dramatically accelerate access to clean mobility.

However, the challenges are real. In markets like Europe and China, Tesla's market share has declined due to strong local competition and rising political tensions. Product delays — like those affecting the Cybertruck or the Roadster — have also weakened its momentum. And with growing global regulation on data privacy, labor practices, and autonomous tech, Tesla must become more adaptive and region-sensitive.

So, what will it take to remain a global leader?

Tesla must evolve from being just a tech disruptor to a truly adaptive automaker. That means expanding its affordable product line, increasing regional localization, building stronger partnerships, and embracing collaboration — through open-source platforms, academic alliances, or co-investments in emerging markets.

In short, Tesla is still a front-runner, but the EV race has become multipolar. Success will now depend not only on innovation, but also on agility, inclusion, and global strategic positioning. And in 2025, amid protectionist U.S. policies and the rise of Chinese EV makers, Tesla is being challenged not just by rivals — but by an entirely new geopolitical and regulatory landscape.

Finally I would like to say that we should not overlook Toyota. Some people view their approach as conservative, but I believe it's actually a very deliberate and context-driven strategy. Their multipath roadmap — combining hybrids, plug-in hybrids, hydrogen, and battery EVs — allows them to adapt to diverse infrastructure realities and consumer needs across different markets. And let's not forget they've also partnered with BYD to co-develop electric vehicles for the Chinese market, which shows they are actively positioning themselves within the EV space, but on their own terms.

Author / Adriana Martínez (Professor and Researcher,

the National Autonomous University of Mexico)

article source / Xuanyuanzhixue Official Accounts

Interview / Meng Wei, Zhang Linyu

Editor / Xuanyuan Small Wave