(This March 21 story has been corrected to fix the company name to Envision Group-backed AESC from Envision AESC, in paragraph 10)

SHANGHAI (Reuters) - China's embassy in Spain said Stellantis ( STLA ) and its Chinese partner Leapmotor plan a $200 million investment in a Spanish factory after a person with direct knowledge of the matter said Spain was the top site to produce the B10 electric crossover for the European market from 2026.

The two companies have been looking for a site in Europe to produce the model which made its debut on the continent in September. Stellantis' ( STLA ) factories in Germany and Slovakia have also been under consideration, Reuters previously reported.

China's embassy said the factory where they plan to invest is in Zaragoza, northeast Spain, but did not provide any further details.

Both firms are now ramping up efforts to increase component procurement from suppliers in Spain to qualify for the highest level of subsidies from the government, said the person, who declined to be named as the matter is not public.

Leapmotor and Stellantis ( STLA ), which are yet to make a final decision, plan to start mass production of the vehicle in the first quarter of 2026, the person added.

Stellantis ( STLA ) declined to comment. Leapmotor did not immediately reply to a request for comment.

Leapmotor has said the B10 is the first of a B series of EVs it is rolling out for overseas markets, and Stellantis ( STLA ) has said the model would be a way to bring "high-tech, affordable EVs" to consumers outside China.

Leapmotor and Stellantis ( STLA ) scrapped the original plan to make the B10 in Poland after the Chinese government privately told automakers to halt big investments in European countries that supported imposing extra tariffs on Chinese-made EVs, Reuters reported previously.

The duo then considered using a Stellantis ( STLA ) factory in Eisenach, Germany, that produces Opel models, and its Trnava plant in Slovakia.

With relatively low labor costs and generous government subsidies for clean energy, Spain has already attracted battery makers such as CATL and Envision Group-backed AESC to set up plants.