Chinese Automakers Build European Plants to Bypass EU Tariffs

Chinese automakers have overtaken Japanese rivals in European market share for the first time over a full quarter, reaching 12.7% of total regional sales through September. This surge, led by hybrids and brands like BYD Company and Chery Automobile, has prompted the European Union to implement countervailing duties on battery-electric vehicles ranging from 17% to 35.3%.

To bypass these tariffs and reduce shipping costs, Chinese firms are shifting from exporting to local production. BYD Company is launching production at its first European passenger-car plant in Szeged, Hungary, targeting models such as the Atto 2 and Dolphin Surf. In Spain, Chery Automobile partnered with Ebro to invest over 150 million euros to revive a former Nissan factory in Barcelona for the production of the EBRO S700. Additionally, Ford Motor Company and Geely Automobile Industry Group have proposed a joint venture at a Valencia plant to produce electric SUVs by 2028.

Industrial cooperation is further deepening through reverse joint ventures and technology transfers. Stellantis began producing the Leapmotor B10 at its Zaragoza facility in Spain, while Chinese battery maker Gotion High-tech agreed to invest 1.1 billion euros for a 49 percent stake in Volkswagen Group's PowerCo plant in Sagunto to introduce lithium iron phosphate technology. Other expansions include a 200 million euro investment by SAIC Inc. in a factory in Galicia, Spain.