BYD is considering the construction of a third production facility in Europe as part of its strategy to strengthen its presence in the region. This move comes as the European Union’s recently imposed tariffs on Chinese-made EVs push major Chinese automakers to localise their operations in order to remain competitive.

Already a leader among Chinese brands in Europe, BYD outsold rival SAIC Motor’s MG brand by 44% in January. However, with increasing regulatory hurdles and mounting pressure from tariffs, BYD is accelerating its efforts to establish local manufacturing. The company is currently developing two plants: one in Hungary, which is scheduled to begin production later this year, and another in Turkey, which is now in the planning stages. Together, these facilities are expected to deliver a combined annual output of 500,000 vehicles, enabling BYD to significantly reduce its reliance on imports while securing a stronger position in one of the world’s most lucrative EV markets.

Speaking to reporters in Frankfurt, BYD Executive Vice President Stella Li confirmed that the company is evaluating the feasibility of a third European factory. A decision is expected within the next 18 to 24 months. BYD is also exploring the possibility of launching local EV battery production in Europe, though no specifics on location or timeline have been disclosed.

While European EV demand has slowed in recent months, the market remains attractive to Chinese manufacturers. Higher vehicle prices compared to China’s intensely competitive domestic market, combined with Europe’s push towards electrification, make the region a strategic priority for BYD. But as tariffs reshape the landscape, establishing localized production has become essential for Chinese brands aiming to maintain market share.

Despite the growing speculation around a third factory, BYD has been cautious about confirming its plans. A company spokesperson clarified that discussions are still at an early stage, and no concrete decisions regarding the location or timeline have been made.

BYD’s expansion in Europe is part of its wider global strategy, which includes rapidly scaling production capacity across multiple continents. Beyond Europe, BYD has already begun setting up manufacturing hubs in Southeast Asia, South America, and North America, underscoring its ambition to become a dominant force in the global EV industry.