BYD needs more factories in Europe and struggles to find them, analysts say

BYD wants three vehicle assembly plants and one battery unit in Europe in the long term. The assessment is from Alfredo Altavilla, the brand’s special advisor for the region and a former Fiat Chrysler executive, who sees local production as a condition to sustain the company’s growth and comply with future European Union rules.

The automaker has already started production at its first European car plant, in Szeged, Hungary, and intends to define by the end of this year where the second will be. Spain and France are the most viable options, according to Altavilla, because they have simpler situations. The main criterion is how much it would cost to renovate the chosen site.

There is a relevant difference from competitors: while other Chinese companies share idle production lines with manufacturers already in place, BYD wants to buy, fully own, and renovate an existing plant, instead of building a unit from scratch. The company also shelved indefinitely the project for a plant in Manisa, Turkey, announced in 2024 and sized for 150 thousand vehicles per year.

Race for idle

factories The movement is not isolated. Leapmotor and Dongfeng have struck deals to use Stellantis lines in Spain and France, respectively, while Geely will produce at a Ford plant on Spanish soil.

Chery, meanwhile, took over a former Nissan plant in the country alongside a local partner. Altavilla told Reuters that it visits factories across Europe and meets rival executives at airports, all after the same asset.

Italy was left as plan B. The executive said that Stellantis, the only major automaker in the country, does not intend to sell any plant, and summed up the impasse by saying that it is not possible to buy something that is not for sale. The statements were made on Wednesday night (16), in Turin, during the inauguration of a dealership of Denza, the Chinese group’s premium brand.

Local content rule puts pressure on the calendar

The rush has a regulatory address, as Brussels prepares the Made in Europe rules, inserted in the Industrial Accelerator Act, which set minimum percentages of European content for electric vehicles sold in the bloc.

According to the proposal presented by the European Commission, the assembly will have to take place in a member state and at least 70% of the parts will need to be of European origin for the vehicle to have access to public purchases and certain incentives. The text is still under negotiation and may come into force as early as next year.

The European strategy repeats the playbook applied by BYD in Brazil. In Camaçari, Bahia, the company has been assembling the Dolphin Mini, King and Song Pro models since 2025 under the SKD regime, in which the cars arrive semi-disassembled from China, with an initial capacity of 150 thousand units per year.

The manufacturer erects stamping, welding and painting buildings to increase the nationalization rate and reduce dependence on imported components.