In a development that could reshape the European automotive landscape, Chinese electric vehicle powerhouse BYD is currently engaged in active negotiations with Stellantis and several other major automakers regarding the potential acquisition or long-term lease of underutilized and idle manufacturing plants across Europe, according to a report by Bloomberg News published on May 13, 2026.
This strategic move, if finalized, would represent one of the most significant entries by a Chinese automaker into European manufacturing territory, effectively bypassing the steep import tariffs imposed by the European Union on Chinese-made electric vehicles.
Why European Plants? The Tariff Game
The European Union introduced substantial tariffs on Chinese-built electric vehicles in 2024, with rates reaching up to 45% on BYD vehicles specifically. These tariffs have made it increasingly difficult for Chinese EV brands to remain price-competitive in Europe. By manufacturing vehicles directly on European soil, BYD would not only sidestep these tariffs but also benefit from being perceived as a local producer — a significant marketing and regulatory advantage.
Stellantis, the multinational automotive group formed from the merger of PSA Group and Fiat Chrysler Automobiles, has been struggling with overcapacity in several of its European plants amid declining sales and shifting market dynamics. Plants in countries such as Italy, France, and Germany have seen reduced production volumes, making them attractive candidates for potential partnerships or lease agreements.
BYD's Growing European Ambition
BYD has already made significant inroads in Europe with models such as the BYD Atto 3, BYD Seal, BYD Dolphin, and the flagship BYD Han. The brand has been gaining traction across Scandinavian markets, the Netherlands, Germany, and the UK.
BYD Atto 3 — One of BYD's popular models in the European market
BYD Seal — A direct competitor to the Tesla Model 3 in Europe
BYD Dolphin — BYD's affordable EV positioned for mass European adoption
BYD has already announced a new electric vehicle manufacturing plant in Szeged, Hungary, which is currently under construction and expected to begin production by late 2025 or early 2026. However, acquiring or leasing existing Stellantis plants would dramatically accelerate BYD's European manufacturing capacity without the time and cost associated with building greenfield facilities from scratch.
Stellantis Plants Under Consideration
While specific plant locations have not been officially confirmed, industry analysts suggest that several Stellantis facilities across southern Europe — particularly in Italy — could be prime candidates. Stellantis CEO Carlos Tavares had previously warned about the challenges of running high-cost European plants in the face of competition from lower-cost Chinese manufacturers, and the company has been actively seeking ways to optimize its global manufacturing footprint.
A Stellantis manufacturing facility — potentially among those being discussed in BYD negotiations
It is also reported that BYD is in discussions with other automakers beyond Stellantis, suggesting that the company is casting a wide net to secure the best possible manufacturing arrangement in Europe.
Geopolitical and Trade Implications
The potential deal carries significant geopolitical weight. European governments have been vocal about protecting their domestic automotive industries, especially given the economic importance of the sector in countries like Germany, France, and Italy. However, a BYD presence in European plants could also mean job preservation and potential new employment in regions where automotive jobs are at risk.
The European Commission will likely scrutinize any such deal carefully, weighing the economic benefits of job preservation against the broader strategic implications of allowing a Chinese state-linked company to operate critical European manufacturing infrastructure.
BYD's Global Manufacturing Strategy
BYD has been executing an aggressive global manufacturing expansion strategy. The company already operates or is building plants in Brazil, Thailand, Hungary, and has explored partnerships in Turkey and Mexico. Taking over European plants would be the most audacious step yet in this global push.
BYD Han — BYD's flagship premium electric sedan targeting European premium segment buyers
What This Means for the European Auto Industry
As an automotive expert, it is clear that BYD's move to potentially take over European manufacturing plants is a watershed moment for the industry. Traditional European automakers such as Volkswagen, Renault, and Stellantis are already facing enormous pressure from Chinese competition. If BYD successfully establishes European manufacturing, it will further erode the cost and logistical advantages that European brands currently hold on home turf.
The European EV market is at a critical inflection point. Consumers are increasingly price-sensitive, and BYD's reputation for delivering feature-rich, competitively priced electric vehicles gives it a powerful advantage. Manufacturing locally would allow BYD to price its vehicles even more aggressively while also benefiting from European supply chains and avoiding currency and shipping risks.
Conclusion
While negotiations are still ongoing and no final agreements have been announced, the fact that BYD is seriously engaged in talks with Stellantis and other automakers about European plant takeovers signals the dawn of a new era in the European automotive industry. The coming months will be crucial in determining whether BYD's European manufacturing ambitions become a reality — and if they do, the ripple effects for the entire industry will be profound and long-lasting.
AutoTickers will continue to monitor this story closely and provide updates as more details emerge.