Chinese Auto Giant SAIC Chooses Galicia for First European EV Factory, Investing €200 Million
The Chinese state-owned automotive group SAIC Motor has formally applied to build its first European electric vehicle factory in Galicia, Spain, a €200 million project aimed at sidestepping EU tariffs and producing 120,000 cars annually by the end of 2028.
The Chinese automotive giant SAIC Motor, owner of the MG brand, has formally submitted its application to establish its first electric vehicle factory in continental Europe in the Galicia region of northwestern Spain. The regional government of Galicia confirmed the move on Monday, declaring the project a strategic industrial initiative to accelerate its development.
A Strategic Landing in Ferrolterra
The factory will be built across two sites: the outer port of Ferrol and the nearby municipality of As Pontes de García Rodríguez, both in the province of A Coruña. The initial investment is set at €200 million for the first phase, with construction scheduled to begin in 2027 and the plant expected to be fully operational before the end of 2028. Once complete, it will have an annual production capacity of 120,000 vehicles.
The project is expected to create 2,300 jobs in its initial phase, broken down into 1,000 direct jobs at the port factory, 1,000 indirect jobs, and 300 positions at the industrial and logistics center in As Pontes. María Jesús Lorenzana, the regional minister of economy and industry, described it as "the largest international project to arrive in Galicia in recent decades."
Dodging EU Tariffs and a European Crisis
A primary motivation for the investment is to mitigate the severe 45.3% tariffs imposed by the European Union on electric vehicles imported from China. By manufacturing locally, SAIC can bypass these duties and accelerate its "In Europe, for Europe" strategy. The move comes as traditional European automakers, particularly in France and Germany, face a structural crisis with a drastic drop in global sales, leaving factories operating at an average overcapacity of 50% and at risk of closure.
Through our 'In Europe, for Europe' strategy, we are not just responding to the future of mobility, we are helping to define it. By investing in local capabilities, strengthening our presence in Europe, and driving a more competitive automotive ecosystem, we are accelerating Europe's path towards a cleaner, smarter, and more sustainable mobility future.
A Trend of Chinese-European Partnerships
The SAIC project is part of a broader trend of Chinese automakers setting up production in Europe to conquer the market. On May 20, the Franco-Italian-American group Stellantis signed a memorandum of understanding with Chinese giant Dongfeng to distribute and manufacture its electric cars at the Rennes plant in western France. Industry experts suggest that other traditional consortia, such as the Volkswagen Group, may soon be tempted to open their factories to Chinese models to fill empty assembly lines.
A Long and Complex Road Ahead
Despite the fanfare, regional officials cautioned that the process is just beginning and will be "very long and complex." Alfonso Rueda, the president of the Xunta de Galicia, acknowledged that significant work remains, including securing port concessions and foreign investment authorization from the Spanish central government. Lorenzana emphasized the need for "maximum technical and environmental rigor" and noted that SAIC has committed to sourcing a very significant part of its supplies from European origin, aligning with an upcoming EU regulation requiring a minimum of 70% local manufacturing.
There is a long and thorough job ahead.
The regional government thanked the central government of Pedro Sánchez for its "exemplary" collaboration, which included high-level meetings and a visit by Rueda and Lorenzana to China in April, following a trip by the Spanish prime minister.
Building a European Hub
Beyond the initial factory, SAIC's long-term ambition is to transform the Ferrolterra region into a full industrial and logistics hub for Europe, similar to the Stellantis complex in southern Galicia. The plant will integrate vehicle research and development, advanced manufacturing, key component supply, and intelligent logistics operations, creating a fully connected industrial ecosystem. MG highlighted the project as a "historic milestone" that will bring world-leading technologies to Europe through localized manufacturing and R&D, supporting the transition towards the EU's 2035 zero-emission goals.
- SAIC Motor first explores alternatives in Galicia for its European factory.
- Galician president Alfonso Rueda and minister María Jesús Lorenzana travel to China for negotiations, following a visit by Spanish PM Pedro Sánchez.
- Stellantis signs a memorandum of understanding with Dongfeng to manufacture EVs in Rennes, France, highlighting the trend of Sino-European auto partnerships.
- SAIC formally submits its application; the Xunta de Galicia declares the project a strategic industrial initiative.
- Construction of the factory is scheduled to begin.
- The plant is expected to be fully operational with a capacity of 120,000 vehicles per year.
