China’s MG, owned by SAIC Motor, is moving closer to building vehicles in Europe as it looks to reduce the impact of European Union tariffs on China-made electric cars.
The company has been exploring a European production site for years, but the plan has gained urgency after the EU imposed additional duties on Chinese-built EVs. Local production would allow MG to avoid some of those tariff pressures and stay competitive in one of its most important international markets.
Spain Emerges as a Leading Option
Recent reports indicate that MG is considering Spain as a key candidate for its first European factory, although the final decision has not been officially confirmed. Spain has become attractive thanks to its established auto industry, skilled workforce, EV incentives, and growing battery supply chain.
Earlier reports had also mentioned Hungary as a possible location, but current planning appears to be shifting toward the Iberian Peninsula.
Why MG Needs a European Plant
The EU’s anti-subsidy tariffs have made Chinese-made electric vehicles more expensive in Europe. SAIC, MG’s parent company, faces one of the highest additional tariff rates because it did not fully cooperate with the European Commission’s investigation.
By producing cars inside Europe, MG could:
- Avoid import penalties on China-built EVs
- Shorten supply chains
- Improve delivery times
- Strengthen its European brand image
- Compete more directly with Volkswagen, Renault, Stellantis, Hyundai, and Tesla
Europe Remains Critical for MG
MG has become one of the most successful Chinese-owned car brands in Europe, especially in affordable electric and hybrid vehicles. Models such as the MG4 and MG ZS helped the brand gain strong visibility among price-conscious European buyers.
Spain has been especially important for MG. According to Spanish media, MG sold more than 45,000 vehicles in Spain in 2025, with the MG ZS ranking among the country’s best-selling cars.
Chinese Automakers Are Localizing Production
MG is not alone. Several Chinese automakers are looking for ways to manufacture vehicles inside Europe to avoid tariffs and reduce political pressure.
Companies such as BYD, Chery, GAC, Leapmotor, and XPeng have all explored or announced European production strategies. Chery has already moved toward EV production in Barcelona, while GAC plans to build electric vehicles through Magna in Austria.
A Strategic Move Beyond Tariffs
Although tariffs are the immediate reason, MG’s factory plan is also about long-term expansion.
A European plant would help the brand become less dependent on exports from China and give it more flexibility to adapt vehicles for local regulations, consumer preferences, and future EU environmental rules.
