BYD's European Blueprint Takes Shape as Italy Slips to Backup Status

BYD's second European assembly plant is down to France and Spain, with Italy a fallback; exports jumped 85.7% from January to August.

BYD has narrowed the hunt for its second European assembly plant to two candidates, with France and Spain now leading the race and Italy relegated to a fallback role. The disclosure came from Alfredo Altavilla, the Chinese automaker's special European adviser, who addressed reporters in Turin on Wednesday and again in Venaria on Thursday.

Altavilla also sketched a far bolder continental footprint than previously understood: three vehicle assembly plants and a battery factory in Europe over the long term. The first of those, in the Hungarian city of Szeged, is already in trial production, with regular assembly slated to begin in the fourth quarter at a planned capacity of 200,000 vehicles a year. For the second site, BYD would rather take over or convert an existing facility than break ground from scratch, and a decision is expected before year-end.

Talks with Stellantis over its plant in Grugliasco, near Turin, went nowhere. According to Altavilla, the site is "not for sale" and now stands completely empty. Italy's bid faltered on the broader competitiveness of its operating conditions, he said, despite ongoing discussions about possible incentives.

Spain's Momentum, France's Scale

Spain's appeal rests on market traction: battery-electric vehicles accounted for 9.6 percent of Spanish new registrations in July, a segment BYD leads. The country is fast becoming the launchpad for Chinese EV makers across Europe, according to adviser Tu Le. Reinforcing that pull is a joint CATL-Stellantis LFP battery plant under construction in Zaragoza, carrying an investment volume of EUR 4.1 billion and capacity of up to 50 gigawatt-hours.

France, for its part, would hand BYD access to one of the EU's largest car markets. A previously announced plant in Turkey, valued at USD 1 billion, is currently on ice.

The location question carries weight beyond industrial policy. A second — and eventually third — EU plant would help BYD cut import tariffs and logistics costs, an advantage that gains significance amid strained trade relations between China and the West.

Exports Provide the Tailwind

Overseas sales are giving the expansion drive hard numbers to stand on. From January through August, exports totaled roughly 1.16 million vehicles, up 85.7 percent from the same period a year earlier. August alone set a record, with 189,466 units sold abroad.

In Europe, BYD overtook Tesla for the first time in the first half, logging 174,144 new registrations against Tesla's 170,351. At home, the picture is reversed: Chinese sales fell 32.7 percent between January and August to about 1.51 million vehicles. That decline reflects an industry swimming in capacity — China's auto sector can build more than 55 million vehicles a year, far above domestic demand — making export markets a strategic release valve.

Beyond Europe, BYD is probing projects in the Democratic Republic of Congo, the world's largest cobalt producer, covering electric buses, vehicle assembly and batteries.

A Japanese First, an Australian Recall

The international push scored a milestone in Japan, where BYD unveiled the RACCO — the first model developed specifically for a foreign market and the first battery-electric vehicle from an overseas manufacturer to enter series production under Japan's strict kei-car rules. Kei-cars represent roughly 40 percent of Japanese new-car sales, a segment foreign brands have long struggled to crack.

Not all the news is expansionary. In Australia, BYD is recalling more than 32,000 units of its Shark 6 plug-in hybrid pickup over a possible defect in the spare-wheel retaining cable, which could come loose. Vehicles built between August 2024 and June 2026 are affected; the bracket replacement will be free of charge and take about half an hour.

Shares Rebound, Still Well Off Highs

The stock responded positively to the European plans on Thursday, climbing 4.7 percent to EUR 9.16 from a prior close of EUR 8.75, extending a recovery that had already added more than 5 percent over the past week. Even so, the shares remain 27 percent below their 52-week high of EUR 12.49, set last October.

For investors, the story cuts both ways: a shrinking core business in China on one side, and an accelerating internationalization — from Europe to Japan to Africa — supplying fresh growth momentum on the other.