Spain balances Chinese EV investment with push for EU trade safeguards

Regions from Catalonia to Extremadura are positioning themselves as China’s primary gateway to the European market, establishing dedicated trade offices to lure giants like CATL, SAIC, and Chery. Spain, which currently ranks as Europe’s second-largest vehicle producer, faces a precarious reality: while the sector accounts for 10% of its GDP and 600,000 jobs, the nation lacks dominant domestic brands. This dependency makes Spain significantly more receptive to Chinese capital than Germany, where established manufacturers are actively resisting domestic plant takeovers by competitors.

Despite the influx of capital, Spanish officials and unions remain wary of a race to the bottom. Mikel Irujo, head of business development for Navarre, warns that European manufacturing cannot compete with China on cost alone. Consequently, he and other stakeholders are championing a 'Made in Europe' law. This proposed framework would mandate local employment quotas, technology transfers, and restrictions on asset ownership for non-EU investors. Currently, such conditions are applied inconsistently on a case-by-case basis, leaving many project details opaque. While the government prepares to launch a Committee for Strategic Investments this autumn to better vet these deals, Chinese firms continue to 'pre-position' themselves in Spain, viewing the country's pragmatic market access as a strategic foothold for their long-term European ambitions.