China’s leading automaker BYD is considering Spain as its preferred location for a third European car factory, according to two sources familiar with the matter who spoke to Reuters. The move comes as BYD looks to expand its sales across the continent.

The planned plant would join two other upcoming BYD factories in Hungary and Turkey, strengthening the company’s position against rivals like Tesla. The investment would also support Spain’s ambitions to become a key hub for electric vehicle production in Europe.