BYD is seeking an abandoned or existing plant in Europe to speed its expansion, Executive Vice President Stella Li has said. The Chinese electric-vehicle maker is pursuing the move amid regulatory pressure and intensifying competition. France and Spain are leading candidates for additional European facilities, while Italy is a backup option.
BYD is also preparing its first passenger-car factory in Szeged, Hungary. The project, reported to involve investment of about €4 billion, is designed for an eventual annual capacity of 300,000 vehicles, with an initial target of 150,000. The approximately 300-hectare site is expected to assemble models including the Dolphin Surf and Atto 2 for European customers. Trial production reportedly began in January 2026 with 960 employees, and vehicle assembly is expected in November or December, within the fourth quarter.
That planned capacity is about 2.3 times BYD’s reported 2025 sales of 128,827 vehicles in the European Union, giving the Hungarian plant room to serve beyond the local market. Adding capacity through an existing facility would extend BYD’s industrial footprint and could avoid the longer construction schedule of a greenfield project.
Regulatory Pressure and Local Incentives
The urgency goes beyond market share. Since 2024, the European Union has imposed countervailing duties on Chinese-made electric vehicles; industry reporting has cited a 27% rate, with the measures scheduled to remain in force through October 2029. Producing vehicles within the bloc could reduce BYD’s exposure to import-related trade barriers, while production location can also affect access to national incentives. Spain’s Plan Auto+, for example, offers greater subsidies for electric cars built within Europe. Manufacturing location is so increasingly relevant to vehicle pricing and consumer demand.
“We would prefer to take over an existing plant,” Li told Reuters during the launch of the BYD Dolphin G DM-i in Berlin. She did not specify a location, but confirmed that the search is focused on southern Europe. Alfredo Altavilla, BYD’s senior advisor for Europe, stressed the timetable: “There is no time to start a plant from scratch today. The priority is to find a ready-built factory, take it over, and adapt it.” Reporting on BYD’s plans has also described an acquisition and retrofit as the likely approach for its next European facility.
Spain’s Strategic Appeal
Spain has emerged as a leading candidate for BYD’s next move, alongside France. As Europe’s second-largest car producer after Germany, Spain offers competitive labor costs and an established supplier network, with a strategic position for exports to the UK, France and other markets. Spanish consumers are less attached to domestic marques than consumers in Germany, where domestic brands have a stronger foothold; the same contrast applies in Italy and France, making Spain an attractive entry point for Chinese automakers.
The pool of available factories is limited. Ford’s Almussafes plant is already committed to Geely, while Stellantis has transferred its Villaverde facility to Leapmotor, with future models planned for production there from 2028. That scarcity could complicate BYD’s search despite Spain’s industrial and logistics advantages. Hungary’s basic transport routes and established automotive-supplier network have also been cited as factors behind the location of BYD’s first European passenger-car plant.
Race Against the Clock
For BYD, the schedule matters. The company’s strategy depends on adapting an existing facility quickly enough to meet market demand and establish production within the EU. The EU’s countervailing duties on Chinese-made electric vehicles are set to remain in force through October 2029, making the timing and qualification of local manufacturing impressive to BYD’s European pricing and distribution plans. Across the region, Chinese electric-vehicle and battery manufacturers have advanced operations at 26 production sites, reflecting a broader shift toward building within Europe.
As the search continues, BYD’s approach reflects a broader change among Chinese automakers: speed and flexibility now matter as much as scale. Its Hungarian plant is moving through commissioning toward passenger-vehicle assembly, while the company weighs acquiring an existing site for further expansion. The outcome will shape BYD’s European presence and show how global manufacturers are adapting to the continent’s changing industrial and trade environment.
