In a significant move to strengthen its presence in Europe, Chinese electric vehicle (EV) giant BYD is planning to expand its manufacturing capabilities on the continent. Bloomberg reported that BYD is considering establishing a third plant in Europe, following the upcoming launch of its first factory in Hungary. Additionally, the company is exploring the possibility of producing batteries for EVs locally, marking a strategic shift toward vertical integration and localization.
BYD Aims to Avoid Tariffs with Local Production
The decision to set up a third production facility in Europe comes as BYD seeks to avoid tariffs imposed by the European Union (EU) on imported electric vehicles. Since 2024, the EU has levied regular import duties of up to 10% and special tariffs of up to 16% on EVs manufactured in China. By producing vehicles and batteries within Europe, BYD can circumvent these tariffs, enhance its competitiveness, and potentially increase profit margins.
The company’s first European factory, located in Hungary, is set to begin production by the end of 2025. This facility will initially manufacture the BYD Dolphin and Atto 3 models. If BYD follows a similar timeline for its third plant, it could start operations as early as late 2028, following a site selection decision in mid-2026.
Battery Production to Boost Local Value Addition
In addition to expanding its vehicle manufacturing capacity, BYD is also eyeing battery production in Europe. This move would allow the company to control a critical component of EVs and further integrate its supply chain across the continent. While the exact location and timing for this project remain under discussion, it signals BYD’s commitment to establishing a robust production base in Europe.
Management Expansion Reflects Growing Ambitions
To support its ambitious expansion plans, BYD has recently bolstered its European management team. Maria Grazia Davino, a former senior manager at Stellantis (now part of the newly formed Chrysler Group), was appointed as Regional Managing Director for Germany, Switzerland, Poland, Austria, and the Czech Republic in December 2024. Her appointment, along with other country managers transitioning from Stellantis to BYD, underscores BYD’s focus on building a strong local presence.
Furthermore, BYD made history by appointing its first-ever Sales Director for Germany at the beginning of February 2025. This new role was filled by a manager from competitor SAIC, highlighting BYD’s aggressive pursuit of market share in one of Europe’s most critical automotive markets.
Mixed Market Performance Despite Growth
While BYD has shown resilience and growth in certain European markets, its overall performance remains uneven. According to January 2025 figures from Jato Dynamics, BYD sold 44% more vehicles in Europe compared to SAIC, which operates under the MG Motor brand. However, other Chinese manufacturers have experienced stagnation or decline in sales, indicating that BYD’s success is not universal across the region.
Challenges and Future Prospects
Despite these challenges, BYD appears undeterred in its quest to establish a strong foothold in Europe. The company’s strategic focus on local production, battery manufacturing, and talent acquisition positions it well for long-term growth. As competition in the European EV market intensifies, BYD’s ability to adapt and localize will be crucial to its success.
Conclusion
BYD’s planned expansion of its European operations marks a significant step in its global strategy. By investing in local production and supply chain integration, the company aims to overcome trade barriers and enhance its competitiveness in one of the world’s most demanding automotive markets. With its ambitious plans and growing management expertise, BYD is poised to make a lasting impact on Europe’s electric vehicle landscape.
