Spain is the favorite to produce cars for the Chinese companies Leapmotor and BYD.

While Germany, France, Italy, and the United Kingdom are vying for the future of their car factories, Spain could soon win two new and important industrial projects. And both of them are Chinese. On the one hand, the production of two Leapmotor cars. On the other, our country is also the leading candidate to acquire BYD's third factory in Europe, as Reuters reported yesterday. Both companies expect to announce their decisions on their European production plans before the end of the year.

Zaragoza, the favorite in the Leapmotor case

This was stated by Francesco Giacalone, Head of Marketing and Product at Leapmotor International, the joint venture formed by the electric startup and Stellantis (which owns 51%) for the production and sale of its cars outside of China. He did so during the presentation in Nice of the new B10 electric SUV, precisely one of the two cars that would be manufactured in Spain. The other, since it shares a platform with the B10, would be the B05, a compact electric passenger car (the size of a VW ID.3 or a battery-powered Peugeot 308).

Giacalone stated that everything will depend on meeting the necessary conditions, "such as having government support." Although everything points to the Stellantis factory in Zaragoza being the chosen one, he also didn't rule out facilities in Vigo or Madrid. However, the latter are very limited in terms of urban planning, while Figueruelas could much more easily accommodate a new assembly line. In fact, work is already underway in this regard, also by suppliers.

Previous messages

Last June, the Chinese Embassy in our country revealed that the two companies planned to invest approximately €180 million in Zaragoza for this purpose . Then, at the end of the summer, Stellantis' new CEO, Antonio Filosa, announced that Leapmotor models would be produced in "one of our factories in Spain."

The decision largely depends on the project receiving the necessary support from the PERTE VEC (Spanish Energy and Energy Development Program). In previous plans, Stellantis had earmarked this support specifically for Vigo and Figueruelas, as well as for the battery giant it is building—together with the Chinese company CATL—near its Aragonese factory.

400 million from PERTE VEC

In this regard, applications for the PERTE VEC IV automobile production aid program can be submitted from today through the 24th. The program is endowed with €400 million (€150 million in grants and €250 million in loans). Furthermore, the Industry announced last Friday that before the end of the year, it will launch a fifth edition of this incentive program with the funds that were not used in the current one. This would represent at least another €500 million.

In the case of BYD, already established as the world's leading manufacturer of plug-in cars (specifically, 100% electric cars), the company is already building two factories in Hungary and Turkey . Both are expected to begin operating next year, although the Turkish plant will be prioritized due to its lower costs. According to sources consulted by Reuters, Spain is the candidate for a third facility due to its competitive manufacturing costs —which would have ruled out the option of Germany —and its clean energy grid.

Authorization of the Chinese Government

This expansionary industrial policy has always been championed by Stella Li, BYD's vice president and its top international executive. "If we want to succeed in Europe, we have to manufacture here, even if it's more expensive," she asserted. Furthermore, they have always considered Spain one of their strategic markets in the region.

Both BYD's and Leapmotor's decisions also seek to avoid paying the tariffs that electric cars (and extended-range electric cars) must pay in the EU if manufactured in China. However, both projects must receive approval from the Chinese government, which has previously intervened in these matters. Specifically, Leapmotor already assembled the T-03 small utility vehicle in Poland, but stopped doing so when Poland took a stand in favor of these tariffs. Spain, on the other hand, ultimately abstained from voting and has been strengthening its relations with the Asian giant for years, even at the cost of angering the European Commission.