The presence of Chinese automotive companies in Europe is accelerating at a pace that is reshaping the continent’s industrial landscape. From assembling electric vehicles inside historic European factories to breaking ground on multibillion-euro battery plants, China’s auto and battery giants are no longer operating from afar. They are now part of Europe’s electrification strategy — and positioning themselves to compete directly with the continent’s long-established manufacturers.
GAC Begins Building Aion V in Austria to Bypass High Tariffs
China’s GAC has officially started producing its electric Aion V at the Magna factory in Austria. While the model will continue rolling off assembly lines in China, the newly activated line in Austria is dedicated to vehicles heading specifically to European markets.
The logic behind this move is straightforward: building the Aion V inside Europe helps GAC sidestep the high tariffs imposed on fully imported Chinese EVs. It’s a strategic step meant to support the company’s broader expansion plan across Europe — and one that’s likely to frustrate European automakers, as a Chinese EV assembled within the EU becomes a far more competitive product on price.
Magna’s plant in Graz is one of Europe’s most respected facilities, with a history of producing models such as the Mercedes-Benz G-Class, Jaguar I-Pace and E-Pace, BMW 5 Series and Z4, and even the Toyota GR Supra. As several production contracts ended in recent years, new capacity became available — offering Chinese brands an opportunity to step in.
Magna has already been assembling Xpeng’s G6 and G9 for Europe using an unconventional method: the cars are built in China, partially disassembled, shipped to Austria, and reassembled to significantly reduce import duties. GAC has not confirmed whether it will apply the same process to the Aion V, but the possibility remains open.
The Aion V itself is built on GAC’s AEP platform, powered by a 181-hp electric motor and offered with 62, 75, and 90 kWh battery options. The largest pack delivers up to 750 km on the CLTC cycle. GAC plans to launch the model across more than 30 global markets, including multiple European countries and Australia.
Great Wall Motor Targets 300,000 Vehicles a Year With Its First European Factory
But GAC is not the only Chinese automaker planting industrial roots in Europe. Great Wall Motor (GWM) is preparing for a major step of its own. The company is aiming for annual production of 300,000 vehicles by 2029 at what will become its first European factory — a goal confirmed by GWM International president Parker Shi.
GWM is currently evaluating several countries, with Spain and Hungary at the top of the list. Labour and logistics costs remain key considerations, especially since the company will initially ship components to Europe for assembly. The automaker is also watching EU industrial policy closely as tariffs and investment regulations continue to evolve.
This push comes as Chinese automakers face fierce price wars and overcapacity at home. Yet in Europe, they encounter different obstacles: higher tariffs on imported EVs, and intense competition from both European brands and Chinese rivals like BYD.
GWM’s EV brand Ora saw European sales fall 41% last year to 3,706 registrations. Even so, the company is pressing ahead with aggressive expansion plans, targeting 1 million overseas sales annually by 2030 — an ambition driving the need to accelerate its European strategy.
The upcoming European factory will produce a full range of powertrains, from combustion engines to fully electric models. One key model will be a multi-powertrain version of the Ora 5 compact SUV, set for a European launch in mid-2026.
CATL Breaks Ground on Spain’s Largest Battery Factory — With Thousands of Chinese Workers
China’s CATL has started construction on what will become Spain’s largest battery factory, a €4.1-billion project built with Stellantis. Located in Figueruelas, the plant is backed by more than €300 million in EU funding and is scheduled to begin production in late 2026.
This facility is part of CATL’s broader European expansion. The company already operates a battery-cell factory in Germany’s Thuringia region, producing lithium-ion cells and modules for European automakers. The new Spanish site will manufacture the same type of EV battery components, giving CATL a second major production footprint in Europe and strengthening its supply capability inside the EU.
A defining feature of the Spanish project is the scale of Chinese expertise being brought in. CATL plans to bring around 2,000 Chinese workers by the end of 2026 to help build the plant, followed later by approximately 3,000 Spanish employees who will be trained to run the facility. Local industry leaders acknowledge that Europe lacks experience in producing advanced battery components at this scale, making CATL’s arrival a major transfer of technical knowledge.
Spain has become a highly attractive location for battery investment due to lower labour costs and industrial energy prices roughly 20% below the EU average. The region already hosts additional battery initiatives from Envision AESC, Volkswagen’s PowerCo, and InoBat. Several Chinese technicians and managers are already in Figueruelas, with more arriving each month as the project ramps up.
CATL’s strategy in Spain differs from its approach in Hungary, where its Debrecen plant relies more heavily on local workers — although hiring challenges there have pushed the production start from late 2025 to 2026.
Union leaders in Aragon emphasize that success will depend on cooperation:
the Chinese teams bring the technical foundation, and Spanish workers will gradually take over as the plant moves into full operation.
A New Industrial Reality for Europe
Taken together, these developments reveal just how deeply Chinese automotive companies are embedding themselves in Europe’s industrial ecosystem. GAC is assembling the Aion V in Austria. GWM is preparing its first full European vehicle plant with Spain and Hungary as the strongest contenders. CATL is rapidly expanding across Europe — operating a battery gigafactory in Germany, building another in Hungary, and now constructing Spain’s largest battery facility.
Beyond these headline projects, several other Chinese-linked operations are quietly reshaping the landscape. Chery is launching production in Spain through a joint venture at the former Nissan plant in Catalonia. NIO already runs a facility in Hungary dedicated to producing hardware for its battery-swap stations. BYD assembles electric buses in Hungary and continues preparing for a future European car plant. Additional activity in the battery sector includes SVOLT building facilities in Germany, EVE Energy developing a cell factory in Hungary, and Gotion High-Tech operating a battery-pack plant in Göttingen, Germany.
Together, these projects signal a clear shift: Chinese automakers and battery giants are no longer just exporting products into Europe — they are building factories, securing supply chains, and becoming part of Europe’s industrial core.
This is no longer competition arriving at Europe’s borders.
This is competition operating inside Europe’s own manufacturing network.
