Article Summary

BYD is China’s top-selling brand. As BYD in Europe expands, it is challenging established automakers with competitive pricing and electric vehicle innovation.

BYD’s impressive growth has made it China’s top-selling brand, surpassing VW in 2024. Its success has drawn both praise and headlines as BYD in Europe expands, challenging established automakers with competitive pricing and electric vehicle (EV) innovation.

The company has set its sights on growing volumes and presence in Western Europe despite multiple obstacles, including the European Union (EU’s) decision in October 2024 to impose tariffs on Chinese battery electric vehicle (BEV) imports. The EU cited unfair Chinese government subsidies to manufacturers as the reasoning behind their decision.

BYD now faces an additional 17% tariff on top of the existing 10% flat rate the EU imposed before its investigation into Chinese BEV imports. Despite these tariffs, BYD’s ambitions for Europe remain strong. 

BYD had already planned for European production, with two plants underway—one is Szeged, Hungary, and another in Izmir, Turkey (now officially Türkiye). This expansion has reinforced BYD’s commitment to offering a full range of BEVs across all segments in Europe. 

The Strategy for BYD in Europe: Diversified Vehicle Lineup

BYD's diversified line-up strategically targets both budget-conscious and luxury buyers. BYD's strategy includes the introduction of premium brands under its umbrella, particularly Denza and Yangwang. Denza, which is designed to compete with the established German luxury brands, is poised to launch its D9 premium seven-seat sportback model in Europe this year. The D9, reminiscent of the Porsche Taycan sport Turismo, delivers 1,000 hp and a 630 km range, making it a strong contender in the premium segment.

Yangwang is set to introduce its U8 SUV-E, a nearly 5.4-meter long premium off-roader competing directly with models like the Land Rover Defender.

BYD is also targeting the entry-level segment with its Seagull A-segment mini car, expected to launch in Europe in April. Priced competitively at around €9,000 in China, the Seagull appeals to budget-conscious consumers while offering strong features. Although not slated for European production, the Seagull’s pricing strategy ensures competitiveness in the EU even with tariffs.

Strategic Shift to PHEVs

Driven by EU tariffs that could impact the pricing and competitiveness of pure EVs, BYD is shifting its European strategy from a BEV-only focus to add plug-in hybrid electric vehicles (PHEVs) to its lineup. BYD plans to launch a PHEV variant of every major new model six months after it launches the corresponding BEV model. This flexible strategy mitigates tariff challenges while catering to European consumers who are moving away from pure BEVs to PHEVs for their extended range and convenience, especially after BEV subsidy withdrawals.

Rapid Production Capacity Expansion

A key highlight of BYD’s European strategy is its rapid regional production expansion. The new Hungarian plant is set to open in October 2025, while the Türkiye facility will begin production in March 2026. S&P Global Mobility forecasts that the Hungarian plant will initially produce the popular Atto 3 BEV SUV.

By 2026, the Hungarian plant will expand to manufacture the Atto 2 BEV SUV-B, targeting the fastest-growing EU segment. The Turkish plant will focus on PHEV models like the Seal 05 and Seal 06, showcasing BYD's pivot to hybrid powertrains in response to market demands.

BYD’s nearly US$1 billion investment in Turkish vehicle production underscores its commitment to the European market. S&P Global projects the Hungarian and Turkish plants to reach a combined annual production capacity of 500,000 units and forecasts an output of 220,000 vehicles by 2027.

The Future of BYD in Europe

BYD's European expansion reflects a well-rounded strategy to capture diverse consumer segments. By offering everything from affordable city cars to high-performance luxury models, BYD is positioning itself as a versatile market player in the region. The decision to include PHEVs is a particularly smart move, helping BYD navigate regulatory challenges while broadening its appeal.

BYD’s European strategy showcases its competency and ambitious growth plans. S&P Global Mobility expects BYD to more than double its sales from 83,000 units in 2024 to 186,000 units in 2025, with volumes more than doubling again to just under 400,000 units by 2029. This relatively cautious forecast reflects the highly competitive European market and ongoing BEV tariff challenges.

S&P Global Mobility offers a comprehensive light vehicle sales forecast covering 145+ countries. Download our data sample to see a preview. 

Download Data Sample

This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.

Content Type

 

Blog

Themes

 

Automotive Industry Forecast & Analysis; Electric Vehicle Industry

Series

 

Behind the Headlines