Several Chinese automakers are exploring plans to establish manufacturing and assembly facilities in Europe, aiming to challenge European carmakers by offering more affordable vehicles. This push comes as demand slows in China, the world’s largest auto market, and European producers fear being priced out by lower-cost imports of Chinese-made electric vehicles (EVs).
The European Union has imposed tariffs on Chinese-made EVs, claiming that they benefit from substantial state subsidies. These tariffs are prompting Chinese carmakers to consider setting up local factories to mitigate the impact of higher costs on their European sales. “We need to localize to remain competitive,” said Stella Li, Executive Vice President of BYD, the world’s largest EV manufacturer, at the Paris car show.
Chery Auto, China’s largest auto exporter by volume, has signed a joint venture with Spain’s EV Motors to open a manufacturing site in Barcelona, where production is expected to begin later this year. In addition, Chery is in talks with Italy and is reportedly considering a plant in the UK later this decade.
BYD has also announced plans to produce components in Europe, assembling battery packs in Hungary and Turkey, while importing battery cells from China. “Our goal is to manufacture all cars sold in Europe locally,” Li added.
Leapmotor, in partnership with Stellantis, is set to expand its EV offerings in Europe, with the T03 compact city car being assembled at Stellantis’ plant in Poland. Stellantis CEO Carlos Tavares has suggested that Leapmotor’s C10 SUV could also be manufactured in Europe.
Other Chinese carmakers, such as SAIC Motor and XPeng, are similarly exploring options for establishing EV factories in Europe. SAIC, the parent company of the MG brand, is selecting a location for a European plant, while XPeng is considering similar steps to avoid the new tariffs.
Chinese automakers’ investment in Europe underscores the increasing competition in the EV market, as European producers face growing pressure from lower-cost imports.
