BYD is set to ramp up its industrial footprint in Europe. As the Chinese automaker readies the launch of car production at its first European plant, it now sees a need for four industrial sites on the continent in the longer term. The group plans three plants dedicated to vehicle assembly plus another focused on battery production. This strategy responds in part to shifts in the European market and BYD’s aim to reduce its exposure to the tariffs imposed on electric vehicles manufactured in China.
A second plant to be announced soon
BYD’s first European plant is currently in Hungary. Located in Szeged, it began pilot production in January with about 960 employees. Large-scale vehicle assembly is slated to begin in November or December 2026, notably for the Dolphin Surf and the Atto 2. Ultimately, the site is expected to reach an annual production capacity of 200,000 cars.
BYD is already working on its second European site and aims to decide by the end of the year. The automaker favors taking over an existing automotive plant rather than building a brand-new site. This approach would allow faster access to industrial infrastructure and help minimize the lead times required to bring production online, as well as the costs associated with constructing a new factory.
France and Spain are currently the two leading candidates. Italy remains under consideration as well, but more as a fallback option. BYD would be evaluating several underutilized industrial sites owned by European automakers. The group does not plan to form a joint venture to operate these facilities and intends to maintain full control of its production.
Produce locally to bypass tariffs
Behind this acceleration lies also a major commercial objective. Electric cars produced in China by BYD and imported into the European Union are currently subject to a combined 27% tariff. Producing directly on European soil would thus allow the company to limit its exposure to these import taxes.
Regulatory changes could further reinforce this need. Brussels is notably working on an Industrial Accelerator Act that could require a substantial share of local content to qualify for certain subsidies or to access certain public markets. A threshold near 70% is currently being discussed.
That is also why BYD is planning a battery factory in Europe. The automaker could thus localize a larger portion of its production chain, rather than merely assembling vehicles on site with components largely manufactured in China.
Having long grown its European sales via imports from China, BYD now appears poised to take a new step toward deeper European localization. With three automotive plants and a battery plant envisaged in the long term, the Chinese manufacturer is aiming to build a truly European manufacturing footprint.
