*

BYD's July market share in Spain 10%, double its European

average and ahead of Tesla

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Pricing, dealership expansion help sales, BYD country

manager

says

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Spain's lack of national carmaker also aids Chinese EV

expansion

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BYD plans local European production, eyes Spain for

expansion

By Alessandro Parodi, Javi West Larrañaga and Albert Gea

BARCELONA, Sept 22 (Reuters) - When Javier Hernandez

went car shopping in Barcelona, he ended up choosing a plug-in

hybrid by China's BYD - swayed by a price nearly 10,000 euros

cheaper than European rivals.

The 51-year-old Spanish excavator operator wanted something

cheap and versatile for city drives and trips to the Catalan

mountains, but had doubts about Chinese electrified cars as he

didn't know the brands well.

With government subsidies, the BYD Seal U DM-I Hernandez

opted for starts at around 30,000 euros ($35,289) in Spain,

compared to over 40,000 euros for VW's Tiguan and Peugeot's 3008

plug-in hybrid models.

"The value for money was better, I tried it out and they

could give it to me right away," he told Reuters.

CHEAPER CARS, MORE DEALERSHIPS

Cost-conscious buyers like Hernandez are fuelling rapid

growth for Chinese EV carmakers like BYD in Spain

and around Europe, stepping up competition with regional and

U.S. rivals like Tesla, Stellantis ( STLA ) and

Volkswagen.

"Until the arrival of BYD, if you wanted to buy an electric

vehicle, you had to spend a hell of a lot of money," BYD country

manager for Spain and Portugal Alberto De Aza told Reuters.

BYD's Spanish dealership network has nearly quadrupled to

almost 100 dealers from 25 last year, De Aza said, accompanied

by aggressive marketing and discounts.

Meanwhile, most established car brands have closed

dealerships. Data from Faconauto shows legacy brands had 1,648

dealerships in 2024, down from 2,164 a decade ago. Volkswagen

and Audi dealerships fell 40% in that period.

"Chinese competitors are increasing the pressure, and not

just on us," Markus Haupt, interim CEO of Volkswagen-owned SEAT

told Reuters last week.

CHINESE EV SURGE IN MARKET SHARE

BYD's share of Spain's EV market, including fully-electric

models and plug-in hybrids (PHEVs), climbed to more than 10% in

Spain in July despite EU tariffs on Chinese-made EVs. That's

more than double its European average and three times Tesla's

3.3%.

Its share of Spain's total car market has risen to 1.8%

through August from 0.3% last year, surpassing brands like

Stellantis' ( STLA ) Jeep or Volvo, data by industry group

ANFAC shows. The Seal U is Spain's most popular plug-in hybrid

so far this year.

Still, it trails behind top selling brands like Toyota ( TM )

, Renault and Volkswagen.

SPAIN: A GATEWAY FOR EXPANSION

Spain's lack of a national automotive champion makes it

fertile ground for Chinese expansion, analysts say.

"It doesn't have a strong local carmaker," said Felipe

Munoz, analyst at JATO Dynamics, adding that SEAT had lost some

of its Spanish identity having been bought by Germany's VW and

looked the most exposed.

SEAT's sales are up 4% so far this year, underperforming the

broader Spanish market which rose 15%, ANFAC data shows. SEAT's

sister brand, up-market Cupra slightly outperformed, with sales

up 17%.

Sales of Chinese cars are growing faster. SAIC-owned

MG was up 58%, while Chery's Omoda more than doubled

its sales in Spain year-on-year through August. BYD sales were

up 675% through August to over 14,000 cars.

BYD EYES EUROPEAN PRODUCTION

With cutthroat competition in their domestic market, Chinese

brands are increasingly targeting Europe.

BYD aims to produce all EVs for sale in Europe locally

within three years and is building a plant in Hungary. Spain

could be an ideal location for further expansion thanks to its

industrial infrastructure and cheap electricity, said De Aza.

Still, challenges remain.

Combined battery-electric and plug-in hybrid sales in Spain

made up 21% of total car sales in July versus 10% in August last

year, but below the European average of 27%.

Insufficient charging infrastructure has caused

slower-than-expected EV uptake in many European markets,

especially in the south. Spain has some 50,000 charging points,

a third of the number in the Netherlands despite a far larger

population.

For now, Spanish motorists much prefer hybrids and PHEVs,

which are central to BYD's European expansion plans.

One of them is Juan Gonzalez, a 56-year-old head of an IT

department who has solar panels that could charge any EV model,

but bought a BYD plug-in hybrid because he worried about longer

journeys.

"If you run out of battery and you have to tackle a mountain

pass you're really in trouble," he said.

($1 = 0.8501 euros)