BYD could build a third European plant in Spain
The news was first reported by Reuters, citing two sources familiar with the plans. One of the sources said Spain is favoured because of its “relatively low manufacturing costs and clean energy network”. Another source cautioned that BYD is still considering other European locations, although Spain currently leads the shortlist.
Moreover, Alberto De Aza, BYD’s country manager for Spain and Portugal, told the news agency in an earlier interview that “Spain would be an ideal location for further expansion of BYD’s European manufacturing footprint because of its industrial infrastructure and cheap electricity.”
The selection of Spain has not been previously reported, although BYD’s plans for a third European plant have been known for some time. A final decision, expected before the end of the year, will require approval from Chinese regulators.
Earlier this year, Reuters reported that Germany had also been evaluated as a potential host country, but concerns over higher labour and energy costs have complicated that option. Neither BYD nor Spain’s Industry Ministry commented on the current status of discussions, the news agency reports.
All of BYD’s electric cars currently sold in Europe are imported from China. These imports attract a standard ten per cent duty plus a 17 per cent anti-subsidy tariff in the case of BYD – totalling 27 per cent. Moving production to Europe could thus represent a significant reduction in cost.
In 2023, BYD announced that it was building a factory in Hungary, and by February 2024, it stated it would open within three years. At the IAA in Munich in September, BYD executive Stella Li initially confirmed the plant would even kick off production at the end of 2025. Initially, the Dolphin and the Atto 3 compact SUV will roll off the production line there.
The factory in Szeged, southern Hungary, is designed for an initial annual capacity of 150,000 vehicles, with plans to expand to 300,000 vehicles. BYD chose the location not only due to its good ties with Hungary via its electric bus plant in Komarom but also to avoid EU anti-subsidy tariffs. The plant was thus seen as a success for the EU’s policy to make EV imports from China less attractive and instead create local value.
A second plant in Turkey is also expected to come online next year. EVs manufactured there will also be exempt from the EU’s special tariffs.
It remains to be seen whether or not BYD will choose Spain as its third location. As mentioned above, the company will need the green light from Beijing before laying a cornerstone. Stronger diplomatic and business relations between Spain and China have improved the prospects of collaboration. Spain abstained from the European Union’s 2024 vote on proposed tariffs for Chinese-made EVs — a stance viewed positively by Beijing.
If BYD does build a new factory in Spain, it would strengthen the carmaker’s position in Europe’s expanding EV market and reinforce the country’s ambitions to become a major manufacturing hub for zero-emission vehicles. In 2023, the EU Commission approved an €837 million Spanish government programme to support the production of batteries for electric vehicles under EU state aid rules. Major manufacturers, including Volkswagen, Chery, as well as Stellantis and CATL, have already committed to projects in the country.
2 Comments