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MG Motor announced on Wednesday its ambitious plan to build a new manufacturing plant and a research and development (R&D) center in Mexico. This strategic move is designed not only to enhance the company’s production capabilities but also to gain valuable market intelligence tailored specifically for the Latin American region.

MG Motor, which is now owned by China’s SAIC Motor Corp (600104.SS), joins a growing list of electric vehicle (EV) manufacturers establishing a presence in Mexico. This list includes prominent companies like BYD (002594.SZ) and Tesla (TSLA.O), although Tesla has recently paused its expansion plans.

According to Zhang Wei, MG Motor’s country head, the new facility will serve a dual purpose. “Our aim is to not only produce vehicles but also to generate market intelligence uniquely tailored for and by Latin America,” he stated in a press release.

While MG Motor has not disclosed the financial details of the investment or the specific timeline for the construction of the plant, the company has emphasized its commitment to making Mexico a significant hub for growth and expansion within the Latin American and Caribbean markets. 

The announcement comes amid broader geopolitical and economic developments. In April, Reuters reported that the Mexican federal government, responding to pressure from the United States, decided to cease offering incentives to Chinese automakers. This policy shift has affected several companies, including BYD, which has stated that its new plant in Mexico will not cater to the U.S. market. Additionally, in May, U.S. President Joe Biden imposed substantial tariffs on Chinese-made electric vehicles.

Tesla’s CEO, Elon Musk, has recently indicated that the company’s plans to build a plant in Mexico are currently on hold. This pause is influenced by the uncertain political climate and the possibility of increased tariffs on Mexican-made EVs, particularly if former President Donald Trump, who has promised heavy tariffs on such vehicles, wins the upcoming November presidential election.

MG Motor’s investment in Mexico underscores the country’s growing significance as a key player in the global automotive industry, especially in the electric vehicle sector. The new facility is expected to bolster MG’s presence in Latin America and contribute to the region’s burgeoning EV market.