Shares of BYD surged 3.7% to CNY 90.12 on July 10 after reports surfaced that the Chinese electric-vehicle giant is nearing a decision on a second European manufacturing site, with Spain and France emerging as frontrunners. The move signals BYD's most aggressive push yet to entrench itself in a market where regulatory walls are rising fast. BYD's Second European Factory Gamble: Can Building Locally Unlock a Continent That Keeps Raising the Drawbridge?
Shares of BYD jumped 3.7% to CNY 90.12 on reports the world's largest EV maker is close to choosing a second European assembly plant, with Spain and France as frontrunners. The rally reflects investors betting that local production is the only durable answer to a European trade environment growing more hostile by the month.
The Tariff Wall Is Getting Higher — And Wider. BYD's Chinese-made electric cars already face a 27% total EU tariff — a standard 10% duty plus an additional 17% anti-subsidy levy. Now the threat is expanding: the European Commission plans to impose new duties on Chinese plug-in hybrids in the coming weeks — a category that accounts for roughly 70% of BYD's German registrations. Building cars inside the EU is the clearest path to sidestepping both existing and forthcoming tariffs.
Speed Matters More Than Blueprints. BYD's European adviser Alfredo Altavilla told Reuters there is "no time to start a greenfield plant today" — the EU's proposed local-content rules would kick in before a brand-new factory could begin production. That is why BYD plans to acquire an existing, underused facility rather than build from scratch. Stellantis, whose Italian vehicle output fell to a 70-year low in 2025, has confirmed discussions with BYD about its idle factories, with Italy and France named as priorities. The Hungary plant — a €4 billion investment with capacity for up to 300,000 vehicles per year — is itself running about a year behind schedule, with mass production now expected in Q4 2026. A brownfield acquisition would be faster and cheaper.
Sales Are Outrunning Supply. European volumes rose 270% in 2025 to nearly 188,000 vehicles and more than doubled again in the first five months of 2026 to above 100,000.
Globally, BYD has raised its full-year export target to 1.5 million vehicles after shipping roughly 792,000 units abroad through June. Without local capacity, those European sales remain hostage to tariff escalation.
The Stock Disconnect. BYD shares have still shed more than 15% year-to-date , weighed down by a slowing Chinese home market. Yet 25 of 28 covering analysts rate it a buy, with a consensus target of HKD 125. A second European plant would accelerate the geographic diversification investors want to see — but execution risk is real, given the Hungary delays and a Turkey project already on ice.