SAIC Motor‘s MG brand is planning to establish a factory in Spain to produce electric vehicles, Bloomberg reported on Friday.

The decision has not been finalized, sources told the outlet, stating that key details — including investment size, production capacity, and timing — are still being determined and could change.

An assembly plant in Spain would allow the company to reduce exposure to the European Commission tariffs on Chinese EVs entering the continent.

The European Commission set the additional duties based on each manufacturer’s cooperation with its 2023-2024 probe into state subsidies, with SAIC facing the highest rate of any Chinese brand.

MG‘s China-built fully electric vehicles have been subject to a 45.3% tariff since October 2024.

A decision to proceed in Spain would effectively rule out Hungary, which had been considered as an alternative location.

Hungary has attracted significant EV and battery investment in recent years, including from Chinese giant automaker BYD, which is nearing passenger vehicle production there.

The company also set its European headquarters in the country.

MG Europe chief William Wang told Automotive News in March that at the brand’s current scale of roughly 300,000 annual sales in the continent, it made sense to open a plant in the region.

Wang said MG had a short list of potential sites and that production could start as early as next year.

However, neither SAIC nor MG have responded to requests for comment by Bloomberg on Friday.

MG was the top-selling Chinese-owned brand in Europe in 2025, registering 307,282 vehicles — a 37% increase from the prior year, according to Dataforce.

The brand, originally British, was acquired by SAIC in 2007.

Within the EU, SAIC — primarily through MG — registered 55,444 vehicles in the past three months, a 5.9% increase year over year, according to data released on Thursday by the European Automobile Manufacturers’ Association (ACEA).

The brand had a share of 2.0% in the market.

Tesla registered 57,792 units in the same period, a 59.6% surge, also holding a 2.0% share, while BYD posted the sharpest growth among the three, with 50,646 registrations — up 169.7% — and a 1.8% share.

Spain’s overall new car market grew 7.6% year over year in the first quarter. ACEA data showed that 300,529 new vehicles were sold in the market.

BEV registrations in the country rose 41.6% to 27,226 units, representing a 9.1% market share — up from 6.9% a year earlier.

Plug-in hybrid (PHEV) registrations climbed 74.2% to 35,740 units, reaching an 11.9% share.

Petrol registrations fell 18.1% and diesel dropped 26.9%.

The ACEA does not provide country-level breakdowns by manufacturer.

BYD announced earlier this month that it sold a total of 9,430 vehicles there, including both fully electric and plug-in hybrid vehicles — leading among plug-in brands with a 16% market share in the country.

Data from the registration tracking platform EU-EVs showed that BYD registered 3,869 EVs in Spain during the first three months of the year.

MG accounted for just 354 units in the same period.

The reported move would make MG the latest Chinese automaker to target Spain as a manufacturing base.

The country has been positioning itself as a hub for EV investment, offering incentives and benefiting from an established automotive manufacturing ecosystem.

Lower labor costs have also attracted automakers to the South of the continent.

Stellantis-backed Leapmotor announced late last year that it will begin production in Zaragoza in the second half of 2026.

The city is home to major vehicle manufacturing by Stellantis.

Chery has also been preparing to start local production in Spain.

The company partnered with Spanish-based EV Motors SA — through its Ebro joint venture — and began assembling vehicles at a former Nissan plant in Barcelona using completely knocked-down kits shipped from China.

Chery‘s Executive VP Zhu Shaodong told Reuters earlier this year that production in Spain would begin “as soon as possible.”

BYD has been reported to be considering both Spain and Portugal for its third European factory, after plants in Hungary and Turkey.

More recently, Spanish Prime Minister Pedro Sánchez has been actively courting Chinese EV investment.

The PM was in China earlier this month, meeting with both President Xi Jinping and Premier Li Qiang.

“In a world that is increasingly uncertain, Spain is betting on an EU-China relationship based on trust, dialogue, and stability,” the Spanish PM wrote on X.

Sánchez visited Xiaomi’s Beijing headquarters as the tech giant prepares to start vehicle sales in Europe in 2027.

Sánchez said Spain offers “a competitive industrial and logistical ecosystem for high-level technological cooperation projects between Chinese and Spanish companies.”

Nio‘s sub-brand Firefly has been in discussions with Spanish distributors about entering the market — after it debuted in Portugal late last year — though no timeline has been confirmed.