During his latest visit to China last April – his fourth in three years – Spanish prime minister Pedro Sánchez didn’t miss out on a photo-op behind the wheel of an electric SUV by Xiaomi.

His charm offensive has been paying off.

Up to seven companies are planning to build their own factories or are negotiating joint ventures like Chery’s in different locations in Spain.

Producing in Spain allows Chinese manufacturers to avoid EU import tariffs, which can be as high as 45.3%. However, this is not the only reason behind Spain's popularity over other EU countries.

“Spain is Europe’s second-largest vehicle manufacturer,” Rubén García, head of the car sector at the Spanish trade union CC.OO., told TEC. “Without leaving the country, brands have a complete industrial ecosystem: component manufacturers, engineering development centres, and a highly skilled workforce.” Wages are also lower in Spain, he said.

Ben McWilliams, a research fellow at Bruegel, pointed to another factor behind this surge: “Spain has been one of the most successful European countries at deploying renewable power. This is reflected in wholesale prices, which have consistently been among the lowest in Europe over the past two years and especially since the Hormuz conflict”, he explained to TEC.

McWilliams also sees other, more political reasons. “The Chinese government has proactively steered investment between EU countries depending on how they voted for the implementation of tariffs [on Chinese exports]”, he continued.

Spain abstained in the vote on this issue, which, in addition to Pedro Sánchez's relationship with China, would partly explain this shift in favour of the country, according to McWilliams.

The EU is taking steps to protect its industry. The Industrial Accelerator Act, recently proposed by the European Commission, includes specific safeguards for the sector. Under the Act, 70% of EV components should be produced in Europe.

But even if they're assembled in Europe, they will remain Chinese cars.

“European manufacturers lost a lot of time in the development of the electric car”, Bela Galgoczi, senior researcher at ETUI, told TEC. Contrary to what happened 20 or 25 years ago, when Chinese manufacturers were learning from Europe,it is now seen as positive if there were some technology transfers in the opposite direction. “Tables are now turning”, Galgoczi concluded.