Image: MG MotorAccording to Bloomberg, which cites sources familiar with the matter, the Chinese automaker is considering establishing its own battery-electric vehicle (BEV) factory in Europe to avoid EU tariffs. Over the past few years, repeated reports have suggested that MG Motor was exploring local production for this reason, though no official confirmation has materialised. Bloomberg emphasises that, according to its sources, the decision has not yet been finalised – ‘and key details, including investment volume, production capacity, and timeline, are still being worked out’. The company itself did not respond to requests for comment from the news agency.A year ago, Automotive News Europe reported, based on informants, that MG was searching for undeveloped land and that the planned factory was expected to have an initial capacity of 100,000 units per year. However, this was never confirmed. Hungary was frequently mentioned as a potential location, partly due to its incentives and the successful establishment of several Chinese EV companies, ranging from BYD to CATL and Eve Energy. Under outgoing Prime Minister Viktor Orbán, Hungary was known for its close ties with China. However, SAIC is not directly a state-owned enterprise of the People’s Republic but is controlled by the Shanghai provincial government – and thus subject to significant political influence.Meanwhile, SAIC had already announced back in 2023 – well before the EU’s tariffs came into force – that it intended to produce the MG4 in Europe. At the time, no statements were made regarding a potential location, but the decision was expected to be finalised within the next two or three years – meaning 2025 or 2026. Senior managers had already indicated in 2023 that production costs would be higher than in China and would therefore be a key focus in selecting a site.In the summer of 2024, northern Spain – specifically the Galicia region in the northwest of the country – was identified as the favourite location. This was partly due to its strong shipping connections to the UK, which remains MG’s most important European market. Following the EU’s decision on tariffs, which subjected SAIC to the highest duty rate of 35.3 per cent, the Chinese government reportedly warned domestic manufacturers against investing in those EU countries that voted in favour of the tariffs – Spain being one of them.What is clear: in terms of sales volume, MG ranks among the most successful Chinese automakers in Europe. In 2024, MG sold around 300,000 vehicles in Europe – the majority of which were electrified models, though the portfolio also includes two internal combustion engine (ICE) model ranges. With these sales figures, the brand grew by 30 per cent compared to 2023. Hybrid models (“Hybrid+”) saw particularly strong growth, increasing by 300 per cent year-on-year to 137,000 units. MG is now present in 34 European countries and collaborates with around 1,300 dealership partners. “Increasing market penetration and a broadly diversified model portfolio are key contributors to the brand’s positive development in Europe,” the automaker stated in its 2025 annual report.bloomberg.com
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