According to sources cited by Reuters, BYD is leaning towards Spain as the leading candidate for a Third European Car Manufacturing Plant, which will complement planned plants in Hungary (under construction, mass production postponed to next year) and Turkey (planned for 2026). Spain is attractive because of its relatively low production costs, cheap and clean electricity, and powerful industrial infrastructure, although a final decision has not yet been made, and any plan requires approval from Chinese regulators, which is expected to be decided before the end of the year.
BYD considered other places, especially Germany, but higher labor and energy costs sparked internal debate. The move is in line with BYD's goal of producing all vehicles for Europe locally within three years to reduce EU tariffs, following 280% growth in European sales in the first eight months compared to 2024 and an operational reorganization that included the addition of managers and dealerships. The warming of relations between Spain and China — Spain abstained during the EU vote on electric vehicle duties — is also contributing to this, while China has reportedly called on automakers to suspend investments in countries that support these duties.
Spain, which is already the second largest car manufacturer in Europe, has attracted significant investments in electric vehicles and batteries from Volkswagen, Chery and CATL thanks to a 5 billion euro program funded by EU funds for economic recovery. Both BYD and the Spanish Ministry of Industry declined to comment.
