China’s largest automaker, BYD, is considering Spain as the leading candidate for its third car manufacturing plant in Europe, Reuters reported, citing two people familiar with the matter. The potential investment would expand BYD’s European footprint alongside its existing projects in Hungary and Turkey, as the company seeks to strengthen its position in the region’s growing electric vehicle (EV) market.
One source told Reuters that Spain has emerged as the frontrunner because of its competitive manufacturing costs and renewable energy infrastructure, aligning with BYD’s long-term production strategy. While no final decision has been made, a third source said an announcement is expected before the end of the year, pending approval from Chinese regulators.
See also: BYD Considers Building Battery Plant in Europe as Regional Expansion Accelerates
BYD’s country manager for Spain and Portugal, Alberto De Aza, previously told Reuters that Spain offered “an ideal location” for further expansion due to its industrial base and affordable electricity. Both BYD and Spain’s Industry Ministry declined to comment.
Spain, the second-largest car producer in Europe, has been working to position itself as a hub for EV and battery manufacturing. The country has attracted major investments from automakers including Volkswagen, Chery, and CATL, backed by a €5 billion plan using European Union recovery funds.
See also: BYD Plans To Build EVs In Europe Within Three Years, Focuses On Plug-In Hybrids For Near Term
BYD’s European sales have risen sharply — up 280% in the first eight months of 2025 compared with the same period a year earlier — after expanding its lineup to include plug-in hybrids alongside fully electric vehicles. The automaker aims to build all cars for the European market locally within three years, helping it sidestep potential EU tariffs on Chinese-made EVs.
BYD’s Hungary plant is under construction, though production has been delayed until next year, while its Turkish factory is expected to open in 2026. The addition of a Spanish facility would further cement the company’s manufacturing base in Europe as competition with Tesla and local automakers intensifies.
