The third European production plant of BYD could be built in Spain

According to a recent report, which cites sources close to the company, BYD is considering establishing its third European production plant in Spain. This decision, if confirmed, would add to the plans already announced by the Chinese manufacturer to build two other plants in Hungary and Turkey, with the aim of serving all existing demand for the brand’s vehicles in Europe with local production, thus avoiding the payment of tariffs.

Spain stands out as the preferred option for BYD’s management due to low costs, compared with other countries on the continent, as well as the availability of a clean energy grid that would allow the company to meet its decarbonisation targets for the production process.

Nevertheless, it is not yet time to celebrate, since BYD has not yet ruled out other alternative locations in Europe. Although it is certainly true that Spain appears to be the best placed at present.

The official confirmation will be announced soon

Although BYD’s plans for a third plant in Europe were already known, the possible choice of Spain as the country for building this plant had not been revealed until now. The final decision, which requires the approval of the Chinese authorities, should be made before the end of the year, so we will soon have answers.

Currently, all BYD vehicles sold in Europe are imported from China, which forces the company to pay a base tariff of 10 per cent, plus an additional 17 per cent special tariff imposed by the EU, which adds up to 27 per cent. Producing the same vehicles in Spain would allow BYD to avoid paying this 27 per cent and reduce transport costs, although production costs would be somewhat higher.

The possible installation of a plant in Spain would strengthen BYD’s presence in the growing European electric vehicle market and support Spain’s ambitions to become a key hub for the production of zero-emission vehicles. Diplomatic and trade relations between Spain and China, reinforced by Spain’s abstention in the 2024 vote on tariffs on Chinese vehicles, have also improved the prospects for collaboration.