BYD is close to choosing Spain as a finalist for its next European factory, a move that could significantly boost the country’s role in electric vehicle manufacturing. The decision is still pending, but competition among Chinese brands for Spanish production is intensifying.
BYD is nearing a decision that could position Spain as a key base for its European operations. The Chinese automaker, a major player in electric and plug-in hybrid vehicles, has confirmed it is actively evaluating sites for its second and third European factories, with Spain among the leading candidates. While no final choice has been made, the possibility alone signals a shift in the region’s automotive sector.
In addition to building a new facility, BYD is considering acquiring an existing plant in Spain. Executive vice president Stella Li confirmed at the IAA Transportation show in Hannover that this strategy could speed up the company’s timeline and avoid some of the challenges of greenfield construction. BYD’s European advisor, Alfredo Altavilla, told Bloomberg that the company’s long-term vision includes three assembly plants and a battery plant in Europe. He emphasized that such expansion is necessary for BYD to reach its production goals and comply with European regulations, but noted that these developments will take time.
According to Reuters, BYD is prioritizing the acquisition and repurposing of existing factories in Europe, rather than building entirely new plants from the ground up.
BYD’s European presence began with its first plant in Szeged, Hungary, while a project in Turkey is currently on hold. The company expects to select its next manufacturing site before the end of the year, keeping the industry’s attention focused on its decision.
If BYD chooses Spain, it will join several Chinese automakers that are turning the country into a major European production center. Chery has launched operations in Barcelona’s Zona Franca, assembling vehicles under the Omoda and Jaecoo brands and planning to revive the Ebro marque. SAIC Motor, which owns MG, has announced a €200 million investment to assemble cars in Ferrol, Galicia. Geely, which controls Volvo and Lynk & Co., has partnered with Ford to jointly manage the Almusafes plant in Valencia, targeting five models and up to 500,000 units annually by 2028. Leapmotor, majority-owned by Stellantis, will use Stellantis’s Spanish plants in Figueruelas and Madrid for its own production. The historic Santana brand is also returning in Linares, Jaén, through a partnership with BAIC.
Globally, BYD has sold more than 14 million vehicles and operates in 112 countries. Its background as a battery manufacturer since 1995 gives it a unique advantage in managing its supply chain, helping it compete with Tesla for the top spot in global electric vehicle sales. Last year, BYD increased its sales by 25 percent, highlighting its momentum in a highly competitive market.
Industry sources cited by Reuters indicate that Spain and France are currently the leading candidates for BYD's next European plant, while Italy has been relegated to a backup option. This reflects a broader strategy to comply with EU local content rules and support long-term growth in the region.
For Spain, BYD’s arrival would mean more than just new jobs and investment. Local assembly would help Chinese automakers avoid high tariffs on vehicles imported from China, making production in Spain a strategic move. The country’s expanding role as a manufacturing hub is already influencing the European auto industry, as detailed in this recent report.
While BYD’s final decision is still pending, its active search for a Spanish site reflects a broader trend: Spain is becoming a center for electric vehicle production, not just a market. The surge in Chinese investment is accelerating changes in the Spanish automotive sector, and BYD’s next step could further establish Spain as a cornerstone of Europe’s electric future. The evidence suggests Spain is moving from following the electric revolution to helping lead it.
