Chinese automaker Chery has struck a pivotal agreement to establish an electric vehicle production base in Spain. This move positions Chery as the second Chinese car manufacturer to push into the European market, following closely behind BYD, which announced a new plant in Hungary last December.

In collaboration with its Spanish partner, Ebro-EV Motors, Chery will commence operations at the site of Nissan’s former factory, shuttered in December 2021 and previously home to nearly 3,000 workers. This joint venture promises to breathe new life into the area, aiming to hire around 1,250 employees and targeting an annual output of 150,000 vehicles by 2029.

The European Union is scrutinizing this expansion, investigating whether unfair subsidies from the Chinese government are allowing electric vehicle manufacturers like Chery to undercut prices and disturb market competition.

A Milestone for Spain’s Industrial Revival

At a ceremony attended by Prime Minister Pedro Sanchez, Chery revealed plans to start assembling its Omoda model, including both combustion and electric versions, in the upcoming months. The initiative will expand to produce electric SUVs under the Ebro brand, beginning in late 2024.

Sanchez hailed the Chery expansion in Spain as a vital step toward the country’s industrial rejuvenation, expected to create significant employment opportunities and stimulate economic growth across the nation.

Spain, Europe’s second-largest automobile producer after Germany, is navigating increasing geopolitical tensions, especially concerning the automotive sector’s protection from overseas competition, notably from China and the U.S. In response to potential unfair practices, the EU launched an inquiry into Chinese subsidies last September, hinting at possible tariffs on Chinese car imports.

Strategic Expansion Amid Regulatory Hurdles

Experts believe that setting up manufacturing hubs in Europe could help Chinese firms like Chery circumvent such tariffs, enabling smoother integration into the European market. Despite regulatory obstacles, Chinese automotive companies are eager to establish a global presence, challenging established giants like Tesla and other international brands in manufacturing, sales, and research and development endeavors.

Image Source: Carscoops