BYD will announce a second European car plant by mid-2027 as Chinese carmakers move more hybrid production into EU factories over the next 12 months.

On 15 October, Beijing began collecting complaints about EU trade barriers ahead of December’s WTO review, which cannot overturn existing tariffs. The EU has moved forward in capping Chinese hybrid imports at 350,000 vehicles next year, well below the roughly 800,000 hybrids Chinese carmakers have exported in 2026. The cap would exempt cars built inside the EU, encouraging local production. BYD is particularly exposed because hybrids now outsell its EVs in Europe, while its Hungarian factory is expected to operate below capacity for another two years. Stellantis and Volkswagen could therefore benefit by leasing underused European factories to Chinese carmakers. Stellantis chief executive Antonio Filosa has already called for partnerships with Chinese carmakers at the Paris Automotive Summit on 13 October. As EU–China trade tensions deepen, EU tariffs will determine where Chinese cars are built, rather than whether they can be sold in Europe.