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China's government is quietly tightening the reins on outbound investments by EV giants BYD (BYDDF) and Geely, delaying approvals for their Latin American projects as geopolitical risks rise. BYD's proposed plant in Mexicofirst announced in 2023remains stuck in limbo, with no final site or timeline, while Geely's Brazil joint venture with Renault is also facing added scrutiny behind the scenes. Sources say China's state planner has flagged concerns around technology transfer, citing potential leakage to the U.S. in an environment already strained by tariff threats and shifting global alliances.
What's changed? The tone. Conversations with regulators have shifted from greenlights to caution flags. Even though Geely insists its Brazil rollout remains on tracklaunching the EX5 model just 52 days after signing with Renaultinsiders say China's approval process is no longer business as usual. More paperwork, longer reviews, and whispers of a Trump comeback are weighing heavily. Chinese auto groups are now being warned: foreign expansions may no longer be the fast-lane path to growth, especially when America's tariff playbook could come back with a vengeance.
This regulatory chill isn't just a China storyit could reshape the playing field for global EV players. For Tesla (NASDAQ:TSLA), it's a window of opportunity in markets like Brazil and Mexico where Chinese competition might stall. But the broader message is louder: cross-border EV bets are now hostage to the whims of politics, not just product. And with BYD pushing factories in Hungary, Thailand, and Braziland Geely weaving alliances from South Korea to South Americathe question is no longer can they expand, but will Beijing let them?
This article first appeared on GuruFocus.