China’s SAIC (MG) targets a 120,000-EV-a-year factory in Spain as EU tariffs bite

China’s biggest automaker is lining up its first European electric-car plant, and it’s aiming straight at Spain’s Atlantic coast.

SAIC Motor, the state-backed parent of the fast-growing MG brand, is preparing a new EV factory in Galicia, a region in northwest Spain. Local officials say the site would be in the province of A Coruña, with construction slated to start in 2027 and production up and running before the end of 2028. The target: 120,000 vehicles a year, backed by an initial investment of about $215 million (roughly €200 million) and a promise of 2,300 jobs.

The timing is no accident. The European Union, often described as Europe’s version of a combined trade bloc and regulatory superpower, has moved to slap extra duties on China-built EVs, with surcharges that can reach 45.3% on some models. For SAIC and MG, building cars inside Europe could be the cleanest way to keep prices competitive and protect a business that’s already selling at scale.

Galicia’s leader puts 2028 on the calendar

The push is being driven publicly by Galicia’s regional government. Its president, Alfonso Rueda, has laid out a tight timeline: break ground in 2027, open before the end of 2028, and ramp to 120,000 vehicles annually.

Galicia is pitching the project as a bet on the next era of manufacturing, one that taps Spain’s increasingly renewable-heavy power grid and positions the region to capture more of Europe’s EV growth.

The $215 million figure is being framed as a starting point, not a final price tag. Auto plants can balloon in cost depending on how much is done on-site, stamping body panels, painting, final assembly, or whether the facility mainly assembles pre-made modules shipped in from elsewhere.

The job number, though, is the headline for a region like Galicia. A 2,300-worker plant would ripple outward into contractors, logistics, maintenance, food service, and temp staffing, if the factory actually ramps as promised.

Where exactly? A Coruña is named, but Ferrol keeps coming up

Officials have pointed to A Coruña province, but industry chatter has also floated Ferrol, a nearby port city, as a serious contender. In projects like this, the map matters: rail access, dock capacity, available industrial land, and environmental permits can make or break the schedule.

Ports aren’t scenery for carmakers, they’re infrastructure. An EV plant lives and dies by the flow of parts coming in and finished vehicles going out, and any plan that leans on maritime shipping often requires expensive upgrades to terminals and road and rail links.

MG’s European surge is the business case

The economic engine here is MG, a once-British badge SAIC has owned since 2007. MG has become the top-selling Chinese auto brand in Europe, with 307,282 vehicles registered in 2025, up 37% year over year, according to figures cited by trade outlets.

At that volume, local production stops being a branding exercise and becomes a supply-chain strategy: shorter delivery times, lower shipping costs, less exposure to ocean freight disruptions, and more flexibility to tailor trims and features to European buyers.

The 120,000-vehicle target suggests a first-phase factory, smaller than Europe’s mega-plants, but large enough to feed meaningful EV volumes without SAIC tying up billions of dollars upfront. It also gives the company room to start with a narrow lineup and expand if demand holds and local suppliers scale up.

EU tariffs up to 45.3% are reshaping the math

The political backdrop is doing as much work as the market. The EU’s added duties on China-made EVs can reach 45.3% for certain models, a level that can flip profitability overnight.

For SAIC, building in Europe is a way to reduce tariff exposure and stabilize pricing, an advantage as critical as battery tech in a price-sensitive EV market.

But a European factory isn’t a get-out-of-politics-free card. European debates over subsidies, component origin, and dependence on Chinese battery supply chains aren’t going away. If SAIC moves forward, expect intense scrutiny of how many parts are sourced locally, where batteries come from, and whether the plant is true manufacturing or mostly assembly.

Spain is turning into a landing pad for Chinese EV makers

SAIC’s Galicia plan fits a broader pattern: Spain is aggressively positioning itself as an EV manufacturing hub, courting Chinese automakers with industrial sites, incentives, and promises of fast permitting.

Chery has already gained a foothold through the EBRO project in Barcelona, assembling vehicles from kits. Leapmotor, backed by Stellantis, the multinational behind Jeep, Ram, Chrysler, and Dodge, plans to launch production near Zaragoza in the second half of 2026. Stellantis has also said it will host Leapmotor production at Spanish facilities, including Madrid’s Villaverde plant.

For Spain, the pitch is straightforward: keep factories humming, protect industrial jobs, and attract investment tied to batteries, power electronics, and in-car software. The risk is just as clear, regions can end up in a bidding war, and early announcements can outpace final contracts, supplier commitments, and regulatory approvals.

What this could mean for Europe’s EV market

If SAIC builds in Galicia, it could accelerate the availability of lower-priced EVs in Europe, especially if local production helps MG avoid tariff-driven sticker shock. That would put more pressure on European and U.S.-aligned brands competing in the region.

The bigger question is how much of the value chain actually lands in Spain. A factory that anchors suppliers and engineering talent could reshape Galicia’s economy for decades. A plant that mostly bolts together imported components would still create jobs, but it would also fuel the political fight over what “reindustrialization” really means in the EV era.