New MG4 EV UrbanImage: MG MotorWith the project, which was initially announced by the regional government of Galicia and has now been confirmed by MG Motor, another Chinese manufacturer is set to build its vehicles in Spain and, by extension, within the EU. Such a step is becoming increasingly important for Chinese carmakers, as the EU has imposed high tariffs on electric vehicle imports from China, even though manufacturers now avoid these duties through individual minimum price agreements.SAIC Group has so far been hit particularly hard by the tariffs, as the company faces additional duties of 35.3 per cent on electric cars on top of the standard 10 per cent import tariff, resulting in a total levy of 45.3 per cent. However, MG Motor does not rely exclusively on electric vehicles in its European business, as it also imports combustion-engine models, plug-in hybrids and hybrid vehicles, which are subject only to the EU’s standard 10 per cent tariff.The new plant in Galicia is specifically set to be built in the port city of Ferrol and is scheduled to open in 2028. The project is expected to create 2,000 jobs. The factory will be constructed in two phases. Once the second phase has been completed – although it remains unclear when this will happen – SAIC plans for an annual production capacity of 120,000 vehicles.“By investing in local capabilities, a stronger European presence and a more competitive automotive ecosystem, we are accelerating Europe’s path towards a smarter and more sustainable mobility future,” said William Wang, Managing Director of MG Europe.It remains unclear which models will be produced at the plant or which powertrains will be used. Given the tariff situation, battery-electric vehicles appear to be the most likely choice, though political developments over the next two years could shift this outlook.SAIC’s plans to establish vehicle production in Europe have been known since 2023, before the EU introduced special tariffs on battery-electric vehicles from China. By summer 2024, northern Spain – more specifically the Galicia region in the country’s northwest – had emerged as the preferred location. One reason was the region’s strong shipping connections to the UK, which remains MG’s most important market in Europe. SAIC has now reportedly finalised this decision, although Hungary had previously also been considered as a possible site.SAIC’s MG Motor brand is currently one of the most successful Chinese automotive brands in Europe, potentially supported by its ‘technology-open’ approach across multiple powertrain types. Last year, MG sold more than 300,000 vehicles across Europe, including the UK. Hybrid models in particular recorded strong growth, with sales rising by 300 per cent to 137,000 units.Among the brand’s electric vehicles, the compact MG4 EV has proven especially successful. MG recently expanded the line-up with the more affordable MG4 EV Urban variant.SAIC is not the first Chinese automaker to commit to manufacturing in Spain. Chery has been producing vehicles since late 2024 through its partnership with Ebro-EV Motors, utilising a former Nissan plant in Barcelona to build the Ebro S700 SUV, available as both an ICE vehicle and a PHEV. Initially, there were speculations that Chery’s Omoda-branded electric vehicles would be produced there. Meanwhile, Leapmotor plans to launch production of the Leapmotor B10 at a Stellantis facility near Zaragoza later this year. BYD is ramping up production at its new plant in Hungary, while Xpeng relies on SKD assembly at Magna Steyr in Austria, as does GAC.mgmotor.eu (in German), xunta.gal (in Galician)
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