Chinese EV Makers Turn Abandoned Western Factories Into Global Launchpads

Chinese EV companies are rapidly expanding overseas by snapping up unused factory space from struggling Western automakers, many of whom are downsizing traditional gasoline-car production, according to Nikkei.

Stellantis recently opened plants in France and Spain to partnerships with Dongfeng and Leapmotor. At the same time, Geely is expected to restart an idle production line at a Spanish factory owned by Ford Motor Company. The trend reflects a broader shift in the auto industry: Chinese EV makers are expanding aggressively while many legacy manufacturers are cutting capacity.

UBS analysts predict Chinese brands could control 35% of the global auto market by 2030, up from 25% this year, helped by China’s low-cost battery supply chain. Their report warned that foreign automakers face “structural market share loss” as competition intensifies.

Nikkei writes that building cars locally has become a practical way for Chinese companies to avoid tariffs and satisfy governments pushing for domestic manufacturing. BNP Paribas analyst James Kan said the strategy helps local economies “feel that they’re getting a cut,” making expansion politically easier.

Europe has become a key battleground. After facing steep EU tariffs, Leapmotor said it would source many components within Europe for production at Stellantis facilities. The company also plans to begin manufacturing in Brazil, where tariffs on imported EVs are set to increase again this summer.

But owning overseas factories brings new complications. Citigroup analyst Harald Hendrikse joked he was “a little amused” watching Chinese firms buy European plants because they are about to learn “how difficult it is to do business” there. Labor costs, regulations, and local sourcing rules could significantly raise expenses.

BYD has already faced setbacks abroad. After renovating a former Ford plant in Brazil, the company became embroiled in controversy over alleged “slavery-like” labor conditions tied to construction work. Even so, BYD is still exploring additional factories in Latin America and Europe.

Many Chinese automakers prefer acquiring dormant facilities instead of building new plants from scratch, which one industry executive described as requiring “tons of extra preparation work.” Companies are carefully comparing costs, efficiency, and demand before making investments.

Meanwhile, European manufacturers are struggling with underused factories. Volkswagen plans to reduce global production capacity by millions of vehicles this decade. CEO Oliver Blume acknowledged the company still has too much unused capacity in Europe, though he later said there are “currently no plans or discussions” with Chinese manufacturers.

For some executives, these partnerships could solve problems on both sides: Chinese EV makers gain faster access to foreign markets, while Western automakers find new uses for factories that would otherwise sit idle.