- BYD is considering Spain as the leading site for its third electric vehicle factory in Europe.
- Spain offers advantages such as low manufacturing costs and a strong clean energy network.
- The final decision is expected by the end of the year, pending regulatory approval in China.
- BYD aims to assemble all vehicles sold in Europe locally within three years.
- Spain has already secured significant electric vehicle investments through a $5.4 billion incentive program.
BYD, China’s largest automaker, is evaluating Spain as the primary location for its third electric vehicle factory in Europe. The company plans to add this new facility to its previously announced factories in Hungary and Turkey, according to people familiar with the matter.
Spain stands out due to its lower labor and manufacturing costs, as well as its clean energy infrastructure. A final decision on the plant location is expected by the end of the year, with approval from Chinese authorities required before proceeding. While Germany was also considered, its higher labor and energy costs were cited as challenges.
BYD‘s country manager for Spain and Portugal, Alberto De Aza, has noted that Spain offers an ideal base for the company’s expansion, citing the country’s robust industrial infrastructure and affordable electricity prices. Both the company and Spain’s Industry Ministry declined to comment on the ongoing decision process.
Sales of BYD vehicles in Europe rose by 280% in the first eight months of 2025, following the introduction of more plug-in hybrids and fully electric vehicles. The automaker has made changes to its European teams, hiring additional managers and dealers to support its growth.
Locally building vehicles sold in Europe within three years will help BYD avoid tariffs on imported cars. The company’s Hungary factory is currently under construction with production delays pushing mass output to next year, while the Turkey facility is expected to open in 2026.
Spain’s electric vehicle sector has gained momentum through a $5.4 billion incentive program launched in 2020, attracting major industry players including Volkswagen, Chery, and CATL. The proposed investment by BYD could also strengthen trade ties between Spain and China as diplomatic and economic relations have grown. For further details, see the original Reuters report.
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