BYD Eyes Spain for Third European EV Factory Amid Rapid Expansion

China’s leading automaker BYD is considering Spain as the top contender for its third European car manufacturing plant, according to sources cited by Reuters. The new facility would complement its existing factories under development in Hungary and Turkey, strengthening BYD’s position in the European electric vehicle (EV) market and supporting Spain’s ambition to become a major EV hub.

Insiders revealed that Spain’s low production costs and clean energy infrastructure make it an attractive option for BYD. While no official decision has been made, a final approval is expected later this year from Chinese regulators. BYD’s Spain and Portugal country manager, Alberto De Aza, highlighted that Spain offers ideal industrial conditions and affordable electricity, which could significantly enhance the company’s European operations.

BYD’s European sales have soared 280% in 2025, driven by strong demand for both plug-in hybrids and fully electric vehicles. To keep pace, the company has restructured its European operations, expanding dealership networks and leadership teams to boost market penetration.

The potential investment aligns with Spain’s broader EV strategy. Since 2020, the Spanish government has launched a €5 billion initiative to attract global automakers and battery producers, including Volkswagen, Chery, and CATL, leveraging EU recovery funds.

BYD aims to manufacture all vehicles for the European market locally within three years, a move that would minimize exposure to EU import tariffs on Chinese-made EVs. The company’s Hungary factory is currently under construction, with mass production delayed to next year, while its Turkish facility is slated to begin operations in 2026.

As diplomatic and trade relations between Spain and China continue to strengthen, Spain’s emergence as a frontrunner signals BYD’s growing influence in shaping Europe’s electric mobility future.