BYD’s search for a new European assembly plant has put Spain in the spotlight. The Chinese company is already building its first European factory in Hungary and is considering Spain and France for its next major investment. It could buy and overhaul an existing Spanish plant. Reuters reports that BYD is in talks with officials and carmakers in Spain, France and Italy about taking over underused factories, and expects to choose a site by the end of 2026.
The timing is challenging for Brussels. The European Union has imposed tariffs of up to 35.3% on electric cars imported from China to protect local carmakers from what the EU calls unfair subsidies. The tariffs apply to cars shipped from Asia; if Chinese brands build within the EU, the rules change. Spain’s strong car industry makes it a prime target. Analysts told Reuters that available factory space, cheap energy and skilled workers are attracting Asian carmakers seeking to avoid tariffs and produce closer to European buyers. Reuters reports that BYD’s European strategy includes plans for three assembly plants and one battery factory, not a single facility.
Deals are already changing Spain’s car field. In Valencia, Ford and Geely have teamed up to restart the Almussafes plant. Ford retains a 66% stake, while Geely takes 34% and is investing €221 million. The plan is to launch five models, including two Geely electric cars. Production is expected to start in 2027, with new cars rolling out in 2028. The plant could produce up to 500,000 cars a year. Spanish business media report that Jeff Jones will be president of the new Ford-Geely joint venture. The deal is official.
In Barcelona’s Zona Franca, the former Nissan site, a Spanish-Chinese partnership is taking shape. Ebro owns 60% and Chery 40%. They have already invested more than €150 million to restart the production lines, targeting output of up to 200,000 cars a year. A Chery electric model is set to join the lineup. The project combines Spanish market access with Chinese technology and production capacity. Industry reports describe the Zona Franca project as a showcase for how Spain’s supplier network and infrastructure help Asian carmakers establish operations.
Galicia is next. MG, owned by China’s SAIC, has selected the region for its first plant in mainland Europe. The investment is €200 million, with 2,000 jobs planned and a target of 120,000 cars a year by 2028. The expansion goes beyond finished cars. In Zaragoza, CATL and Stellantis are building a battery gigafactory priced at €4.1 billion. It is planned to have 50 GWh of capacity and create more than 4,000 direct jobs by late 2026. Leapmotor, part-owned by Stellantis, is making battery modules in Mallén and preparing to build its B10 electric SUV in Figueruelas. The move is from simple partnerships toward a lasting industrial base.
The wave of Chinese investment is drawing attention outside Europe, too. The Ford-Geely deal has drawn criticism in the US. The Trump administration has warned about the risks of relying on Chinese technology. Ford has defended its Spanish deal, bringing the global stakes into focus.
Spain’s appeal lies in its strong car sector, skilled workers and suppliers ready for new business. For Chinese brands, local production means moving closer to European customers while avoiding import tariffs. In August, pure electric and plug-in hybrid cars accounted for 27.7% of Spanish car registrations. From January to August, 185,339 electrified cars were sold in Spain, up 34% from the previous year.
The change goes beyond the number of Chinese cars on Spanish roads: the factories themselves are changing. The old model of shipping cars from Asia is giving way to Chinese investment, technology and expertise embedded in Spain’s car plants.
Chinese brands are already gaining ground with models such as the Lynk & Co 08 EM-P, as reported earlier. But competition is moving from showrooms to factory floors. BYD may soon build in Spain; Geely is already in Valencia, Chery is producing in Barcelona, MG is setting up in Galicia and CATL is expanding in Zaragoza.
Europe faces a difficult choice. Tariffs are intended to protect local industry, while the continent also needs investment and jobs to accelerate its shift to electric vehicles. As Chinese carmakers become part of Europe’s industry, the line between rival and partner is blurring. Spain stands to gain investment and technology, but must also guard its long-term control over its factories. The next stage of Europe’s electric-car race will play out on the factory floors of Valencia, Barcelona, Galicia and Zaragoza.
