BYD Accelerates Local Production in Europe: All EVs for the EU Market to Be Manufactured Locally by 2028 | BlogMotori.com

The Chinese automotive giant BYD, an undisputed leader in the domestic market with the ticker 002594.SZ, has announced ambitious plans to adapt to the challenges of the European market. Within three years, the company will produce all electric vehicles (EVs) intended for sale in Europe locally, a strategic move to circumvent tariffs imposed by the European Union. Meanwhile, plug-in hybrid electric vehicles (PHEVs) are expected to dominate European sales in the short term. These statements come directly from Stella Li, executive vice president and number two at BYD, interviewed by Reuters during the IAA Mobility car show in Munich.

The Strategy to Become "More European" in Production

"We are training to be more European in production," said Stella Li, emphasizing BYD's commitment to integrate into the industrial fabric of the continent. The company is already building a factory in Hungary, which is expected to start production this year, and plans to commence output in Turkey by 2026. These initiatives are a direct response to the EU tariffs imposed last year on electric vehicles made in China, motivated by the belief that Chinese manufacturers benefit from government subsidies.

When asked how long it would take to fully meet European demand with local production, Li replied: "Give us two or three years." This means that by 2028, BYD aims to produce all necessary EVs for the EU market locally, thereby reducing costs associated with imports and customs barriers. This transition will not only strengthen BYD's presence in Europe but also make it more competitive in an increasingly stringent regulatory environment.

The Dominant Role of Plug-in Hybrids in the Short Term

BYD began its European journey by selling only fully electric cars, but by the end of last year, it announced the introduction of plug-in hybrid models. These have seen immediate success among consumers: in the UK, for example, BYD's best-selling PHEV model has become the company's top seller. Stella Li revealed that in the next six months, BYD will launch three or four more PHEVs, predicting that these will soon surpass the sales of fully electric models in Europe.

"In the next one or two years, our plug-in hybrids will dominate sales" in Europe, Li stated. This forecast reflects a strategy aimed at capturing a larger market share, leveraging the popularity of hybrids as a bridge to fully electric mobility. PHEVs, in fact, offer an ideal compromise for consumers still hesitant about full-electric, combining electric efficiency with the flexibility of combustion engines.

Expansion with the Luxury Brand Yangwang and Global Prospects

Looking to the future, BYD is not limiting itself to local production and hybrids. The company plans to launch its luxury brand Yangwang in Europe in 2027, a step that could further elevate its positioning in the premium segment. This launch comes amid impressive global growth: BYD's worldwide sales reached 4.2 million cars in 2024, a tenfold increase compared to 2019.

However, in China – the domestic market – BYD has recorded several months of decline in sales and production. Stella Li downplayed these signals, calling them "normal" after a prolonged period of exponential growth. "BYD is still number one in China, we are satisfied with the results," she said. "Perhaps in the last one or two years our share was too high as number one, so now we are returning to a normal life." Despite this, the company's sales are still increasing at double digits this year, and Li emphasized that growth in 2025 will be driven by sales outside of China.

Leadership and Succession Issues

One element of uncertainty concerns BYD's leadership. According to a new policy from the Chinese government, chairman Wang Chuanfu, who is 59 years old, may have to retire by early 2027. When asked about a succession plan and who might replace him, Stella Li responded with a hint of mystery: "Let's keep it a secret." This reticence suggests that the company is preparing for a smooth internal transition while maintaining a focus on operational continuity.

In summary, BYD is navigating the complexities of the global market with a clear vision: localizing production to overcome trade barriers, emphasizing plug-in hybrids to win over European consumers, and luxury ambitions for the future. With a sustained growth trajectory, the Chinese company is reaffirming itself as a key player in the transition to sustainable mobility, ready to consolidate its presence in Europe and beyond.