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China’s largest electric vehicle (EV) maker, BYD, is reportedly considering Spain as the leading candidate for its third car manufacturing plant in Europe, following its ongoing projects in Hungary and Türkiye.
The prospective plant would mark a further step in BYD’s bid to expand its footprint across Europe and strengthen its proximity to a market where the brand lifted its sales by 280% in the first eight months of 2025.
One of the sources familiar with the matter told Reuters that Spain’s relatively low production costs and clean energy network make it an attractive location.
However, another source noted that the final decision has yet to be made, with other potential sites still under review.
The choice will ultimately require approval from Chinese regulators and is expected before the end of the year.
BYD’s country manager for Spain and Portugal, Alberto De Aza, previously told Reuters that Spain offers "an ideal location" for expanding the company’s European operations due to its established industrial infrastructure and affordable electricity.
Spain, which ranks as Europe’s second-largest car manufacturer after Germany, has been working to attract large-scale electric vehicle and battery investments.
The government’s €5 billion ($5.78 billion) program launched in 2020 uses European Union pandemic recovery funds to support the country’s EV and battery manufacturing ambitions.
Major automakers such as Volkswagen, Chery, and CATL have already announced projects in Spain, reinforcing the country’s emerging role as a key EV production center.
BYD aims to produce all cars sold in Europe locally within the next three years, a move designed to bypass EU tariffs and strengthen its supply chain resilience.
The Chinese giant’s first move is the upcoming $1 billion plant in Türkiye’s western Manisa province, with a capacity of 150,000 vehicles annually and scheduled to open in 2026.
The company’s Hungarian factory, now under construction, has faced minor delays, with large-scale production expected to begin next year.
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