Spain: Europe's emerging EV production hub

Despite modest domestic demand for electric vehicles, Spain is emerging as a key EV production hub in Europe. The country is already the region's second-largest automotive manufacturer. Its combination of a substantial industrial base, skilled labor, moderate labor costs, and cheap green energy makes it an ideal center for the industry's shift to electrification. An additional incentive is the availability of spare capacity following a decline in demand for diesel models.

Stellantis has long relied on Spanish plants as the foundation of its European EV strategy. In Madrid, it produces the e-C4 and e-C4 X; in Zaragoza, the Corsa-e, e-208, and Ypsilon; and in Vigo, the e-2008 and electric vans. Starting in 2026, the Chinese brand Leapmotor, which is part of the Stellantis alliance, will begin manufacturing there.

Volkswagen is entering a phase of active expansion. The Martorell plant is preparing to produce the CUPRA Raval and VW ID. Polo, while Navarra is gearing up for the ID. Cross and Skoda Epiq. Critical infrastructure includes the PowerCo gigafactory in Sagunto. A second battery center is being established by CATL in partnership with Stellantis in Zaragoza.

Mercedes-Benz is holding onto Vitoria as a key site for electric vans like the EQV and eVito. Meanwhile, Chery is rolling out production of the OMODA 5 EV in Barcelona. Renault is considering moving production of future electric Scenic models and a new coupe crossover to Palencia, which would significantly boost local EV output.

Chinese automakers BYD and Geely are exploring the possibility of opening factories in Spain. BYD may choose the country for its third European plant, and Geely is assessing the potential of Ford's site in Valencia. This move would allow them to bypass European import tariffs on electric vehicles.

For Spain, this presents a unique opportunity to become the primary production pole of the European electric vehicle industry in the coming years.