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Chinese electric vehicle (EV) giant BYD is reportedly in discussions with Stellantis and other European automakers about potentially building vehicles at underused factories across Europe, according to a new Bloomberg report.
In this articleâ–ľ
Why Local Production Matters
Stella Li Makes BYD’s Position Clear
Stellantis Open To More Partnerships
The Industry Continues To Change
The move highlights how aggressively Chinese automakers are trying to establish a stronger manufacturing footprint inside Europe as governments continue tightening tariffs and trade rules on imported Chinese-built EVs. Instead of shipping vehicles from China, companies like BYD are now exploring ways to produce vehicles locally, helping avoid import duties, transportation costs, and political pressure from European regulators.
Why Local Production Matters
BYD Seal Compact Sedan EV. (BYD).
Building vehicles in Europe gives Chinese automakers several advantages. Producing vehicles locally can help companies qualify for government incentives tied to European-built vehicles while also reducing shipping delays and avoiding logistical headaches tied to international transport. It also allows automakers to sidestep some of the steep tariffs the European Union (E.U.) has placed on Chinese EV imports.
At the same time, several European factories are currently operating below full capacity as automakers continue adjusting to changing EV demand. That creates an opportunity for companies like BYD to utilize existing production facilities instead of spending billions constructing entirely new plants from scratch.
For Stellantis, these types of agreements could help improve factory utilization while generating additional revenue from facilities that may not currently be running at full output.
Stella Li Makes BYD’s Position Clear
BYD Han EV. (BYD).
BYD Executive Vice President Stella Li confirmed the company is actively evaluating factory opportunities in Europe, including plants located in Italy.
“It’s very hard to partner and ask permission from another person,” Li said during the Financial Times Future of the Car conference in London. “We prefer to run everything on our own. We partner with every auto manufacturer to either sell the battery to them or work with them for different aspects… but not manufacturing.”
That statement suggests BYD may not be looking for a traditional joint-venture manufacturing setup. Instead, the company appears more interested in independently operating existing facilities while still collaborating with automakers like Stellantis in other areas such as battery technology or supply agreements.
Stellantis Open To More Partnerships
Alfa Romeo Giulia production at the Cassino Assembly Plant. (Stellantis).
For Stellantis, the talks align with comments recently made by CEO Antonio Filosa, who has repeatedly emphasized partnerships as an important part of the company’s future strategy.
Last week, Stellantis and Leapmotor announced plans to begin joint vehicle production in Europe, expanding their relationship beyond simple distribution agreements.
Filosa recently indicated that the Leapmotor partnership could potentially serve as a model for future collaborations with other automakers. However, he also clarified this week that future deals may extend beyond Chinese brands alone.
Speaking during the Financial Times conference, Filosa said Stellantis had learned the power of partnerships and that “they will be embedded in our strategy going forward.” He also stated, “By working with a set of partners to build a roadmap of technological improvement, supply chain improvement and maybe capacity utilization, those are very good topics to work together and create benefits for both sides.”
The Industry Continues To Change
2026 Fiat 500 Ibrida (Hybrid) at the Mirafiori Assembly Plant. (Stellantis).
The possibility of BYD working with Stellantis shows just how quickly the automotive industry is evolving.
Not long ago, many legacy automakers viewed Chinese manufacturers strictly as rising competitors. Today, partnerships involving manufacturing, battery development, supply chains, and technology sharing are becoming increasingly common as companies look for ways to reduce costs and stay competitive during the transition to electrification.
Nothing official has been announced between BYD and Stellantis at this point, and discussions reportedly remain exploratory. Still, the conversations themselves are significant.
For BYD, a partnership with Stellantis could provide a faster path toward expanding its European presence. For Stellantis, it could help keep factories active while opening new business opportunities.
Either way, it is another clear sign that global automakers are entering a new era where cooperation may become just as important as competition.
Robert S. Miller