Chinese EV makers are moving into Europe’s underused car factories, turning idle plants into production hubs for electric vehicles. Chery will begin building EVs later this year at a former Nissan plant in Barcelona, Spain, and is in talks to use Nissan’s Sunderland factory in England. Geely is reportedly taking over part of a Ford plant near Valencia, while BYD is eyeing half of a Volkswagen facility in Dresden, Germany.
For decades, Western automakers built cars in China to serve local demand. Now Chinese brands are setting up production in Europe to avoid tariffs and sell at lower prices. The EU imposes a 10% import duty on Chinese EVs, plus an additional 17% anti-subsidy tariff—part of a 2024 levy package reaching up to 35.3%. Local manufacturing sidesteps these costs entirely.
Many of the factories changing hands are struggling. Taking over an existing plant is faster and cheaper than building a new one, with infrastructure, workers, and supply chains already in place.
Related: Chinese universities drop language majors for AI
In Sunderland, Nissan would keep ownership and build Chery’s cars under contract on an unused line.
BYD’s potential takeover of half of Volkswagen’s Dresden plant may be the most ambitious move. The high-profile facility once let buyers watch cars being assembled. If confirmed, it would place the world’s top EV maker at the center of Germany’s auto industry.
Bill Russo, founder of Automobility, notes that running factories in unfamiliar markets is difficult, and some companies may struggle.
Related: Diverging Views on EV Battery Recycling
Western automakers face a long-term challenge once their cars rely on Chinese supply chains.
John Helveston, an EV industry researcher at George Washington University, states that partnerships buy time but won’t solve this issue. Because the Chinese supply chain is closed off, keeping pace with competition will be difficult.
Stephen Ezell, vice president at the Information Technology and Innovation Foundation, argues that Chinese EV makers built their lead through state subsidies and copied Western technology. He believes European governments should block their expansion rather than welcome it.
Related: Party Games To Play During Covid-19 Lockdown
Currently, the deals are simple.
Western automakers get a tenant for their empty plants. The tenant gains a permanent foothold in Europe—one that may be hard to remove.