BYD is preparing to choose a location for its next European car assembly plant, with Spain and France as the basic contenders. The company already has a factory under construction in Hungary, but the new site would take its European expansion further.
Rather than ship cars from China, BYD plans to build a full manufacturing network in Europe. The company aims to establish three car factories and a battery plant on the continent, driven by rising sales and the need to handle stricter EU trade rules. Reuters reports that Spain and France lead the race for the second plant, while Italy remains a backup. BYD expects to make a final decision by the end of 2026.
BYD is targeting an existing underused factory in Europe, which it would acquire and repurpose, rather than starting a greenfield project. That approach could accelerate its expansion and cut costs.
Alfredo Altavilla, BYD’s European advisor and former Fiat Chrysler executive, confirmed that Spain and France are the priorities. Italy remains a fallback. BYD wants to buy and update an existing underused factory rather than build from scratch, a move that could save time and money. The company is talking with European manufacturers and governments to find a suitable site. Automotive World says this approach should help BYD adapt quickly to local market needs and regulations.
The timing matters. The European Commission currently imposes extra duties on electric vehicles imported from China. For BYD, the total tariff is 27%: a 10% EU import duty plus an additional 17% for the company, information from several industry sources. The often-quoted 35.3% tariff applies to SAIC/MG, not BYD, as recent fact-checks by electrive and EU Today clarify. BYD’s shift to local production responds to these tariffs and to expected 2027 rules requiring more EU-sourced parts in cars sold in the region, Reuters reports.
Hungary has secured BYD’s first European passenger car plant, in Szeged, announced in 2023. The Dolphin Surf is among the models planned for production there. BYD is also building its European headquarters and R&D center in Budapest, a sign of its long-term commitment to the region. The Hungarian plant is basic to BYD’s strategy for meeting EU regulations and supporting its growth targets.
Reuters reports that tariffs are one factor shaping BYD’s choice for its second plant: upcoming EU requirements for local content in electric vehicles are expected to tighten by 2027. The regulatory shift is prompting Chinese automakers to speed up their search for suitable European production sites.
BYD’s international sales show why the decision is urgent. In the first eight months of 2026, the company sold 1,162,260 vehicles outside China, up 85.72% from the previous year. In August alone, it sold 189,466 units abroad, accounting for 43.03% of total monthly sales. Deutsche Bank data shows that BYD aims to reach up to 2 million overseas sales by the end of 2026 and more than 2.5 million in 2027, with Europe a major focus.
The expansion reaches beyond the BYD brand. The group’s premium arm, Denza, is rolling out new models and opening retail locations in cities such as Turin and Paris. Other Chinese automakers are pursuing similar plans, as recent launches aimed at the Spanish market show.
For Spain, hosting BYD’s next factory would bring new industrial jobs and strengthen the local supply chain, giving the country a bigger role in the electric vehicle sector. France remains in the running, but BYD’s focus on buying an existing underused plant could give Spain an edge, given the current availability of such sites.
BYD’s decision will show where Europe fits in the global electric vehicle market. Its push for local production despite regulatory hurdles signals intensifying competition in Europe. For policymakers and industry leaders, the next move will test how open Europe’s car sector can remain as the market changes.
