BYD Eyes Spain as Top Candidate for Third European Plant

BYD plans to achieve full local production of electric vehicles in Europe within the next three years

On October 14, Reuters reported, citing people familiar with the matter, that BYD has selected Spain as its preferred location for its third European manufacturing plant, with a final decision expected by the end of the year.

BYD has already committed to building its first European passenger car facility in Hungary, targeting start of production by late 2025 with an initial annual capacity of 150,000 vehicles, scalable to 300,000 units.

Meanwhile, the company is developing a 150,000-unit-per-year vehicle plant and R&D center in Turkey, scheduled to begin operations by the end of 2026. Should Spain be confirmed, the three locations would form a production corridor stretching from Southern to Central and Eastern Europe.

According to sources, Spain gained an advantage over previously rumored candidates such as Germany due to its lower manufacturing costs, clean energy infrastructure and supportive policy incentives for EV investments.

Alberto De Aza, General Manager of BYD for Spain and Portugal, previously said Spain offers “ideal conditions to further expand European manufacturing.”

However, a third source cautioned that no final decision has been communicated internally and any outcome remains subject to approval by Chinese regulators, with BYD still evaluating alternatives outside Spain.

The company’s localization push in Europe is driven not only by capacity planning, but also by rising trade frictions. The European Parliament is still debating the prospect of imposing higher tariffs on Chinese EV imports, and Spain notably abstained in relevant votes, signalling a comparatively neutral stance.

As Europe’s second-largest vehicle producer, Spain launched a €5 billion ($5.8 billion) industrial fund in 2020 to support EV and battery manufacturing, attracting major investments from Volkswagen, Chery and CATL.

Data from the European Automobile Manufacturers’ Association (ACEA) show that BYD sold 96,000 vehicles in Europe in the first eight months of this year, up 280% year-on-year.

Speaking at the IAA Mobility show in Munich, BYD Executive Vice President Stella Li said the company aims to localize 100% of its EV production in Europe within the next three years.