BYD Reportedly Favors Building Third European Plant in Spain

According to foreign media reports, two informed sources recently revealed that Chinese automaker BYD considers Spain as the preferred location for establishing its third car factory in Europe. Currently, BYD is seeking to expand sales on the European continent.

BYD had previously planned to build two factories in Hungary and Turkey. If BYD establishes an assembly plant in Spain, it will not only significantly enhance the company's strength in Europe but also help Spain achieve its goal of becoming an important hub for electric vehicle production.

Image source: BYD

A source said that BYD favors Spain because the country has relatively low manufacturing costs and a clean energy network.

Alberto De Aza, the regional manager of BYD for Spain and Portugal, stated last month that Spain, with its well-established industrial infrastructure and inexpensive electricity, will be an ideal location for BYD to further expand its manufacturing scale in Europe.

However, a third source said that BYD has not made any final decisions yet, and besides Spain, the company is still considering other countries. The decision regarding the factory is expected to be made by the end of this year and will require approval from Chinese regulatory authorities.

Both Spain's Ministry of Industry and BYD declined to comment on the above report.

In March this year, Reuters reported that BYD had also considered building factories in other countries, including Germany. However, due to the high labor and energy costs in Germany, this plan sparked controversy within the company.

After beginning the sale of plug-in hybrid and pure electric vehicles, BYD's sales in Europe in the first eight months of this year increased by 280% compared to the same period in 2024. In addition to enhancing its model lineup, it was reported in April this year that BYD has undertaken a comprehensive reform of its European operations, boosting sales by hiring more managers and increasing the number of dealers.

BYD plans to achieve localized production of all its electric vehicles sold in Europe within the next three years, which will help it avoid EU tariffs on Chinese electric vehicles. Currently, BYD's factory in Hungary has started construction, but sources say that BYD has postponed the large-scale production launch of this factory to next year; BYD's factory in Turkey is also scheduled to be operational in 2026.

In recent years, diplomatic and commercial relations between Spain and China have significantly warmed. Last year, Spain abstained from voting on the European Union's imposition of tariffs on electric vehicles manufactured in China.

As the second largest automobile producer in Europe, Spain launched a €5 billion plan in 2020 to attract investments in electric vehicles and battery manufacturing using the EU's pandemic recovery fund. As a result, the country has successfully attracted significant investments from industry giants such as Volkswagen, Chirey, and CATL.