China's SAIC Motor to Build First EU EV Factory in Spain to Bypass Tariffs

In a move reflecting the shifting strategies of Chinese manufacturers facing rising trade barriers, SAIC Motor has announced plans to build its first EU factory in the Galicia region of Spain. The company intends to make an initial investment of 200 million euros to construct the facility, aiming to bypass EU import tariffs imposed on Chinese-made electric vehicles. Construction is scheduled to begin in 2027, with operations targeted to commence by late 2028 at an annual capacity of 120,000 vehicles.

This expansion comes as new car sales in the EU show signs of cooling, growing by 5.1% year-on-year per market data released on May 27, 2026, down from a previous growth rate of 12.5%. By choosing Spain, SAIC follows its peer Chery Auto, which has already established production in Barcelona, further cementing Spain's role as a primary European hub for Chinese EV manufacturing. Industry analysts suggest that transitioning from an export-led model to local production is a strategic necessity to protect MG's market share amid a global price war.

Investors are closely monitoring SAIC Motor (9973.HK) shares to assess the long-term impact of this capital expenditure on the company's balance sheet. Looking ahead, local economic conditions remain a factor, with Spain's business confidence recently reported at -3.7 as of May 28, 2026. Key catalysts to watch include any further EU policy shifts regarding Chinese imports and the potential for Spanish government subsidies to accelerate the 2027 construction timeline.