MUNICH (Reuters) -China's No. 1 automaker BYD will make its EVs for sale in Europe locally within three years, helping it avoid EU tariffs, while plug-in hybrids should dominate its European sales in the short term, a top executive said on Monday.

"We are training ourselves to be more European in production," executive vice president, Stella Li, BYD's No. 2 executive, told Reuters at the IAA Mobility car show in Munich.

BYD is building a factory in Hungary that should commence output this year, and is due to start production in Turkey in 2026.

The EU imposed tariffs on Chinese-made EVs last year because it believed China's automakers benefited from government subsidies.

Asked how long it would take BYD to produce all of the EVs it needs to supply European demand, Li said: "Give us like two to three years."

BYD originally sold only fully-electric cars in Europe, and late last year, announced it would also start selling plug-in hybrids. Those have proven popular with consumers and in Britain, for instance, the automaker's top-selling model is a plug-in hybrid (PHEV).

Li said that within the next six months, BYD will launch another three to four PHEVs and expects them to soon outsell fully-electric models in Europe.

"In the next one or two years, our plug-in hybrids will be dominating sales," in Europe, She said.

Li said BYD would launch its luxury Yangwang brand in Europe in 2027.

BYD's global sales soared to 4.2 million cars in 2024, up tenfold from 2019. But it has seen several months of falling sales and production declines at home in China.

This was normal after a prolonged period of growth, Li said.

"BYD is still the number one in China, we're happy with the results," she said. "Maybe in the past one or two years our share was too high as number one, so now we go back to living normal."

The company's sales are still up by double digits this year and she said BYD's growth in 2025 will be driven by sales outside China.

Under new Chinese government policy, BYD Chairman Wang Chuanfu, who is 59, may have to retire in early 2027.

Asked if Wang had a succession plan and which executive might be tapped to replace Wang, Li said: "Let's keep it a secret."