Feb 14 Reuters China39;s BYD Co Ltd will set up a new electric vehicle EV factory in Mexico, Nikkei reported on Wednesday, citing the company39;s Mexico head, as the EV maker aims to establish an export hub to the United States.

BYD, known for its cheaper models and a more varied lineup, recently overtook its biggest rival Tesla Inc to become the world39;s top EV maker in terms of sales.

According to the Nikkei report, BYD has launched a feasibility study for the Mexican plant and is currently negotiating with officials over terms, including the factory39;s location.

While BYD has its sales concentrated in China, opens new tab, it also aims to expand globally and is building new plants overseas in addition to expanding Chinese exports.

Mexico39;s massive automaking sector, populated by many of the industry39;s top global players, is tightly integrated with the U.S. industry.

Overseas production is indispensable for an international brand, BYD Mexico country manager Zhou Zou told Nikkei, opens new tab.

The carmaker39;s Mexico office declined to comment.

Major U.S. automakers have warned that Chinese cars could spell doom for their own prospects, among them Elon Musk39;s Tesla.

Last month, Tesla39;s chief executive predicted that Chinese automakers will demolish global rivals without trade barriers.

Musk39;s view is echoed by a leading advocacy group.

The introduction of cheap Chinese autos which are so inexpensive because they are backed with the power and…