Spain is being tipped as the prime candidate for BYD’s third European car plant as the Chinese automaker seeks to localise more of its supply chain and avoid tariffs. The firm already has factories planned in Hungary and Turkey, and this new site would further anchor BYD’s continental footprint. Sources close to BYD point to relatively low manufacturing costs in Spain as a key draw, together with a power network increasingly reliant on clean energy. Spain’s ambition to become a major EV manufacturing hub has led it to roll out policy incentives and infrastructure upgrades to back battery and vehicle projects. Spanish authorities have not confirmed a deal, reflecting the sensitive nature of the negotiations. Any final decision remains contingent on Chinese regulatory approval, with a deadline likely before the end of the year. BYD’s European sales are already surging, up about 280 percent in the first eight months of 2025, a rise that has intensified pressure to produce locally in order to mitigate tariff exposure. The company’s strategy is to have its European models manufactured wholly within the continent within three years. The Spanish push for investment in EV and battery industries is already evident. A €5 billion plan is underway to attract manufacturers to Spain’s market. Spain ranks as Europe’s second-largest car producer, making it a logical site for further expansion by foreign automakers. While Spain leads in the current internal deliberations at BYD, competing nations are not out of the race. Germany was under consideration before concerns about higher labour and energy costs dampened its appeal. In parallel, the European Commission is probing BYD’s plant in Hungary over potential unfair subsidies, adding another layer of regulatory risk to expansion plans. The outcome will be a milestone for Spain’s industrial ambitions and BYD’s European trajectory—though there is no guarantee yet that the frontrunner leads at the finish line....