The move, announced by BYD’s Executive Vice President Stella Li during the IAA Mobility car show in Munich, underscores the automaker’s strategy to sidestep EU tariffs and strengthen its competitive edge against European rivals.
The company is already building a factory in Hungary, set to begin production this year, and is preparing another plant in Turkey that will come online in 2026. These facilities are central to BYD’s plan to reduce reliance on exports from China, a necessity after the European Union imposed tariffs on Chinese-made EVs over concerns of government subsidies distorting competition.
BYD’s rapid growth has turned it into a global powerhouse, with sales reaching 4.2 million cars in 2024—ten times more than in 2019. However, despite its success, the automaker faces challenges at home, including slowing sales and production declines. Against this backdrop, Europe has become a crucial growth market, with plug-in hybrids playing an increasingly important role.
BYD strengthens European presence with new factories
BYD’s expansion in Europe is anchored by two major projects. Its Hungarian factory is scheduled to begin operations this year, marking the company’s first large-scale production site in the European Union. By 2026, a second plant in Turkey will further boost production capacity.
These investments are designed not only to reduce the impact of EU tariffs but also to improve supply chain efficiency and bring the company closer to European consumers. Stella Li emphasized that BYD is “training itself to be more European in production,” reflecting a long-term commitment to local manufacturing and integration into the regional market.
Industry analysts view this strategy as a way for BYD to build trust among European regulators and customers, positioning itself as a competitive yet cooperative player in the continent’s automotive sector.
Plug-in hybrids to dominate sales in the short term
Although BYD initially focused on fully electric cars in Europe, it has shifted its strategy to include plug-in hybrid electric vehicles (PHEVs), which are proving increasingly popular with consumers. In the United Kingdom, for example, BYD’s top-selling model is a PHEV.
Li revealed that within the next six months, BYD will launch three to four new plug-in hybrids in Europe. She predicted that these models would soon outsell pure EVs, saying, “In the next one or two years, our plug-in hybrids will be dominating sales in Europe.”
This emphasis on hybrids highlights the transitional nature of the European market, where many consumers are still concerned about charging infrastructure and range limitations of fully electric cars. By offering both EVs and PHEVs, BYD aims to capture a wider segment of buyers and accelerate its market penetration.
Luxury brand Yangwang set for European debut
In addition to expanding its mainstream lineup, BYD plans to bring its luxury brand Yangwang to Europe by 2027. This move will allow the company to compete with established premium automakers such as BMW, Mercedes-Benz, and Audi on their home turf.
The introduction of Yangwang reflects BYD’s ambition not just to sell affordable electric and hybrid cars but also to establish a foothold in the high-end market. Industry observers expect this to further solidify BYD’s image as a versatile player capable of catering to diverse consumer demands.
Global growth and challenges in China
While Europe is becoming increasingly important for BYD, the company continues to face challenges in its domestic market. After years of rapid growth, sales in China have shown signs of slowing, with several months of decline in both demand and production.
Stella Li described this slowdown as a natural adjustment after years of extraordinary expansion, noting, “Maybe in the past one or two years our share was too high as number one, so now we go back to living normal.” Despite these fluctuations, BYD remains China’s top automaker and continues to record double-digit growth in overall global sales.
The company’s strategy now relies heavily on international markets, with Europe playing a leading role in its global expansion plan.
Leadership transition on the horizon
A potential change in leadership also looms for BYD. Under new Chinese government regulations, Chairman Wang Chuanfu, who is currently 59, may be required to retire by early 2027. Asked about a succession plan, Stella Li declined to provide details, saying only, “Let’s keep it a secret.”
Such a transition could reshape the company’s long-term direction, but with solid foundations in both domestic and international markets, BYD is expected to maintain momentum regardless of leadership changes.
Outlook for BYD in Europe
BYD’s aggressive expansion strategy positions it as a formidable competitor in Europe’s evolving automotive landscape. By localizing EV production, launching a wave of new hybrid models, and preparing for a luxury brand debut, the company is setting itself up for long-term success.
While challenges remain—ranging from regulatory hurdles to fluctuating consumer demand—BYD’s adaptability and global scale give it significant advantages. With its eyes firmly set on Europe, BYD’s next chapter could redefine the balance of power in the electric vehicle market.
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