Spain is reportedly attractive due to its low manufacturing costs and clean energy network.
China’s largest automaker BYD is apparently favoring Spain as the top candidate for its third European car factory, joining planned plants in Hungary and Turkey
The move would strengthen BYD’s presence in Europe, intensify its rivalry with Tesla, and support Spain’s ambitions to become a major electric vehicle hub, Reuters reported, citing two people familiar with the matter.
Spain is reportedly attractive due to its low manufacturing costs and clean energy network, though the final decision, expected by year-end, still requires Chinese regulatory approval. BYD has also considered Germany, but high labor and energy costs have been points of concern.
BYD’s country manager for Spain and Portugal, Alberto De Aza, previously said Spain offered an ideal base for expansion thanks to its industrial infrastructure and cheap electricity. The company and Spain’s Industry Ministry declined to comment.
BYD’s European sales soared 280% in the first eight months of 2025 after the company expanded its range of plug-in hybrids and full EVs. The automaker has also overhauled its regional operations, bringing on managers and dealers to speed up growth.
The move could also deepen ties between Spain and China, which have already grown as Spain abstained from an EU vote on tariffs on Chinese-made EVs. Spain has already welcomed big bets on EVs from Volkswagen, Chery and CATL through a €5 billion incentive program that was rolled out in 2020.
BYD aims to build all cars sold in Europe locally within three years to avoid tariffs. Its Hungary plant is under construction, with mass production delayed until next year, while the Turkey plant is expected to open in 2026.
On Stocktwits, retail sentiment for BYD was ‘bullish’ amid ‘normal’ message volume.
BYD’s U.S.-listed stock has risen 21% so far in 2025.
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