BYD Narrows European Plant Race to France and Spain as Italy Slips to Backup

BYD picks France and Spain as frontrunners for its second European assembly plant, with Italy as "Plan B" and a decision due before year-end.

BYD has whittled down the shortlist for its second European assembly plant to two contenders, with France and Spain emerging as the frontrunners while Italy settles for reserve status. The Chinese automaker's Europe special adviser, Alfredo Altavilla, laid out the thinking during appearances in Turin on Wednesday and Venaria on Thursday, describing Italy as merely "Plan B" for the next factory. A final call is expected before the year is out.

The scale of the ambition stretches well beyond a single site. Altavilla sketched a long-term vision of three assembly plants plus a battery factory on European soil — a build-out designed to satisfy EU local-content requirements and lock in the company's regional sales targets. The first of those plants, in the Hungarian city of Szeged, is already ramping up, with mass production slated to arrive by the fourth quarter of 2026. For the second site, BYD would rather take over or convert an existing facility than break ground from scratch.

That preference ran into a wall in Italy. Talks with Stellantis over its Grugliasco plant near Turin went nowhere, according to Altavilla, who said the site is "not for sale" and now sits completely empty. Italy's broader pitch faltered on the competitiveness of its operating conditions, he added, despite ongoing discussions about possible incentives.

What Tilts the Scale Toward Madrid and Paris

Spain's case rests on momentum in its own market. Battery-electric vehicles accounted for 9.6% of Spanish new registrations in July, a segment BYD currently leads. The country's growing supplier ecosystem — including the large CATL and Stellantis battery plant in Zaragoza — adds further weight to its bid. France, for its part, offers access to one of the EU's largest auto markets.

For investors, the location question carries more than industrial-policy intrigue. A second and eventually third EU plant would help BYD cut import tariffs and logistics costs — an edge that grows more valuable against the backdrop of strained trade relations between China and the West. The company is casting its net beyond Europe as well: in the Democratic Republic of Congo, the world's top cobalt producer, it is scouting projects spanning electric buses, vehicle assembly and batteries.

August Sales Set a Record, but the Home Market Cools

Hard numbers are backing the expansion push. BYD moved a record 440,293 new-energy vehicles worldwide in August, up 17.84% from a year earlier. Overseas deliveries stole the show with a 134% surge, while battery-electric shipments hit a fresh monthly high of 256,230 units. At home, though, volumes fell 14.34% to 250,827 vehicles — a clear sign that foreign markets are becoming the primary growth engine.

That shift helps explain why BYD has raised its 2026 overseas sales forecast. Instead of the 1.5 million vehicles targeted in March, the company now aims for 1.9 million to 2.0 million units, according to an investor presentation evaluated by Deutsche Bank. For 2027, management points to a goal of more than 2.5 million vehicles. Hitting those marks would cement BYD's standing as one of the world's largest electric-vehicle exporters.

The strategic pivot abroad also reads as a release valve for domestic overcapacity. China's auto industry commands manufacturing capacity exceeding 55 million vehicles a year, far above what the home market absorbs.

Diplomatic Signals Add to the Tailwind

Recent days have brought a string of encouraging headlines. Bloomberg reported that Beijing is weighing BYD chairman Wang Chuanfu for a possible economic delegation tied to the September 24 summit between Xi Jinping and Donald Trump in Washington. No final list has been set, but the market took the prospect of high-level diplomatic involvement as another positive signal for the company.

Shares Gain, Yet the Longer Slide Persists

The stock responded to the flurry of news with a 4.1% advance on Thursday to EUR 9.10, building on a 2.8% rise the prior session. Even so, the equity remains well shy of its 52-week high of EUR 12.49, set in early October 2025 — a gap of roughly 27% to 28%. The expansion blueprint and record deliveries have yet to pull the shares free of their longer-term downtrend, even if they are delivering noticeable short-term lift. Attention now turns to whether the second European site decision, due by year-end, supplies the next catalyst.