(April 24): SAIC Motor Corp’s MG unit plans to set up a European factory in Spain that will make electric vehicles (EVs), according to people familiar with the matter, a move that would help the Chinese automaker reduce exposure to EU tariffs.
The decision hasn’t been finalised and key details — including investment size, production capacity and timing — are still being worked out and could change, the people said, asking not to be identified discussing private deliberations.
A decision to proceed in Spain would effectively rule out Hungary, which had been considered as an alternative location, the people said. Hungary has drawn significant EV and battery investment in recent years — including from BYD Co — supported by an expanding supplier base and logistics links, as well as connectivity to China-backed infrastructure under the Belt and Road Initiative.
SAIC and MG representatives didn’t respond to multiple requests for comment.
Establishing manufacturing in the European Union would allow SAIC-MG to minimise tariffs applied to vehicles shipped from China, as Brussels intensifies scrutiny of subsidies and competitive dynamics in the EV market. For Chinese automakers, building locally is increasingly viewed as essential to sustaining growth in the region.
Spain has been positioning itself as a hub for electric vehicle investment, offering incentives and benefitting from an established automotive ecosystem. Such locations include Zaragoza, home to major vehicle production by Stellantis NV, which offers a skilled workforce and logistical advantages.
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