Automakers scale back Mexico investments amid tariff concerns

Major automotive manufacturers are scaling back or pausing investments in Mexico due to concerns regarding potential U.S. tariffs and trade policies.

Honda has confirmed it will no longer produce the hybrid Civic in Guanajuato, moving production to Indiana to avoid a 25% tariff on vehicles made in Mexico. Similarly, Chinese firm BYD has frozen plans for a large electric vehicle plant in the country to avoid being labeled as Chinese-made products entering the U.S. market.

Tesla’s gigafactory project in Santa Catarina remains stalled as Elon Musk awaits the outcome of U.S. elections and clarity on tariff wars. Nissan has also warned that the return of permanent tariffs could lead to the closure of facilities in Aguascalientes and Morelos, potentially impacting 15,000 direct jobs. In contrast, Hyundai recently announced a $21 billion investment in the United States, highlighting a shift in nearshoring trends toward the U.S. market.