• is considering building its third European car assembly plant in Germany as it looks to as build brand awareness and acceptance, according to Reuters.
  • BYD is currently building two NEV plants in Europe, one in Hungary and the other in Turkey.
(A BYD Song L on display at the June 2024 new energy vehicle show in Shanghai. Image credit: CnEVPost)

BYD (HKG: 1211, OTCMKTS: BYDDY) is considering setting up its third European car assembly plant in Germany, Reuters said in a report today, citing a person familiar with the matter.

The Chinese new energy vehicle (NEV) maker is currently building two NEV plants in Europe, one in Hungary and the other in Turkey.

BYD executive vice president Stella Li said in an interview with Automobilwoche earlier this month that the company is considering building a third plant to serve the European market within the next two years, but she did not disclose the exact location.

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Germany is BYD's top choice, although the matter is being questioned internally due to the country 's high labor and energy costs, low productivity and low flexibility, Reuters said, citing the source.

BYD is considering a third plant in Western Europe as it looks to build brand awareness and acceptance among European customers as a local manufacturer, the source said.

The company is also adhering to a directive from the Chinese government not to invest in countries that support import tariffs, according to the report.

This means BYD is currently discounting some EU member states, including Italy and France, because they supported tariffs, the source added.

The European Commission announced on October 29, 2024 that it had closed its anti-subsidy investigation into imports of battery electric vehicles (BEVs) from China, deciding to move forward with imposing additional tariffs.

Different companies face different rates, with BYD at 17.0 percent. These tariffs were additional to the original 10 percent.

In a vote by EU member states in early October last year, there was a significant divergence of opinion among different members.

Germany, Hungary, Malta, Slovakia, and Slovenia voted against, while Bulgaria, Denmark, Estonia, France, Ireland, Italy, Latvia, Lithuania, Netherlands, and Poland voted in favor of the additional tariffs, according to a Bloomberg report on October 4 of last year.

Austria, Belgium, Croatia, Cyprus, Czech Republic, Finland, Greece, Luxembourg, Portugal, Romania, Spain, Sweden abstained.

The degree of "pro-China" of individual countries in the next few years will play a decisive role in determining the location of BYD's third plant in Europe, Reuters said in the report today, citing the person familiar with the matter.

The final decision on the third plant will also depend on BYD's sales performance in Europe and the capacity utilization of its Hungarian and Turkish plants, the person said.

BYD's plant in Hungary is due to start production in October, while the Turkish plant is due to start production in March 2026, the report noted.

When fully operational, they will have a combined capacity of 500,000 vehicles per year, the report said.

BYD announced on December 22, 2023 that it would build a passenger NEV production site in Szeged, Hungary, its first passenger NEV plant in Europe.

On January 30, 2024, BYD signed a land pre-purchase agreement with the government of the city of Szeged for its passenger vehicle plant in Hungary.

On July 8, 2024, BYD signed an investment and cooperation agreement with the Turkish government for the construction of an NEV production facility in Turkey, with a planned investment of about $1 billion.

The Turkish plant, which has a planned annual capacity of 150,000 vehicles, would start production by the end of 2026, BYD said at the time.

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