SAIC Motor, the Chinese automotive giant behind MG and Maxus, has chosen Galicia for its first electric vehicle factory in Europe. The decision has quickly become a flashpoint in Spain’s industrial and political field. Announced on June 1, the plant is planned for the Ferrolterra region, about five kilometres from Ferrol’s naval base, arsenal and Navantia shipyards, which carry out strategically impressive naval work.
The Ministry of Defence has raised concerns about the factory’s proximity to these sensitive military facilities, including the risk of espionage. The security debate centers on the location and the potential use of connected-vehicle technology or communications infrastructure for surveillance or intelligence gathering. It does not stem from a reported security incident at the proposed factory. While the government has signaled support for the project, Digital Change Minister Óscar López stated that Spain would not block the investment on national-security grounds, leaving open the possibility of conditions to protect critical interests. Spain is examining the case through its foreign-investment screening process, where safeguards may be considered.
Alfonso Rueda, president of the Xunta de Galicia, described Defence’s reservations as “striking,” arguing that security and economic chance can be reconciled. The regional government has called for guarantees that the project will not compromise military operations. It has also presented the plan as a historic chance to attract high-value industry and support suppliers in Galicia.
SAIC Motor, which is ultimately controlled by Beijing, has pledged nearly €200 million for the first phase. Construction is scheduled to begin in 2027, with operations expected before the end of 2028. The announced maximum capacity is 120,000 vehicles a year, although reported initial production could be about 70,000. The MG Go has been identified as the first model expected to be associated with the assembly operation, which is planned to include electric and hybrid vehicles. The investment is expected to create up to 2,300 jobs across Europe: 1,000 direct positions in Ferrol, another 1,000 indirect jobs, and 300 in As Pontes. The project will span three sites: manufacturing and logistics at Ferrol’s outer port, auxiliary industries in Mandiá, and a logistics hub in As Pontes. A later expansion could raise total investment to roughly €500 million and employment to as many as 5,000, but those figures relate to a potential subsequent phase.
SAIC Motor’s position in Europe is complicated by the EU’s trade measures. The European Commission imposed an additional 35.3% countervailing duty on SAIC-made battery-electric vehicles imported from China, on top of the standard 10% car tariff. The measures took effect on October 30, 2024, and were set for five years. The additional rates were 17% for BYD, 18.8% for Geely and 20.7% for other cooperating manufacturers. The Commission’s investigation identified SAIC as a non-cooperating exporter. Local assembly in Europe could reduce the project’s exposure to duties on vehicles imported from China, giving the Ferrol investment a commercial dimension alongside its industrial one.
Despite these hurdles, SAIC Motor sold 127,585 vehicles in the EU in the first half of the year, up 19.1% from the previous year. About 12% were fully electric models, though sales of electric and plug-in hybrids dipped slightly compared with the same period in 2025. The company has shifted its European focus toward self-charging hybrids, which now account for 62% of its regional sales.
Environmental compliance is another challenge. SAIC Motor is among five automakers at risk of EU penalties for exceeding the 95 grams per kilometer CO2 emissions cap set for 2025 to 2027, with current average emissions at 98 grams. This regulatory pressure adds to the complexity of the company’s European expansion.
Spain has become a basic entry point for Chinese automotive groups seeking to avoid tariffs and benefit from ‘Made in Europe’ rules. Alongside SAIC Motor, brands such as Chery, Santana Factory, Geely and Leapmotor have launched operations in the country. The Ferrol proposal stands out for its proximity to military and naval facilities, putting industrial-policy ambitions alongside questions about foreign ownership and national security.
The debate is not unique to Spain. Across Europe, governments are weighing the benefits of new jobs and technology against risks to strategic infrastructure. The situation echoes broader questions about the future of the automotive industry, as hybrid and electric solutions reshape the sector. One example is the recent launch of electric trailer modules for diesel trucks.
As the SAIC Motor project moves toward its planned construction start in 2027, its progress will depend in part on how Spanish authorities reconcile economic ambitions with protections for military operations and other critical interests. The outcome could shape Spain’s approach to future foreign investment near sensitive infrastructure.
