Dresden, May 5, 2026, 13:45 CEST
Volkswagen is denying rumors that China’s BYD is eyeing a takeover of its Gläserne Manufaktur facility in Dresden, dismissing fresh speculation around the landmark German plant. “The company firmly rejects” such claims, a Volkswagen spokesperson told BILD, after local media picked up a CarNewsChina story suggesting talks were underway. BILD
Timing is key here. The Dresden plant stopped making cars on Dec. 16, 2025, closing the book on 24 years of production. Volkswagen announced plans for an innovation campus with TU Dresden to take over part of the property, while VW itself is hanging onto the building for its sales and marketing operations.
This comes just days after Volkswagen CEO Oliver Blume floated the possibility to analysts that the group might share some of its European factory capacity with Chinese partners—a sensitive proposition, considering Chinese EV makers are pushing to set up shop locally while European automakers grapple with underused plants. Blume said VW would look into whether there are “opportunities” for those partners in Europe. Reuters
CarNewsChina first floated the plan, which was later picked up by Focus, BILD, and Börse Online: BYD would take over part of Volkswagen’s Dresden facility to assemble electric vehicles, with the remaining space allocated to a Saxony and TU Dresden tech hub project. Volkswagen dismissed the story as inaccurate, while BYD wouldn’t comment, according to CarNewsChina.
BYD has a clear incentive to set up production in Germany: building cars locally would let it slap the coveted “Made in Germany” tag on its vehicles and keep manufacturing within the EU. The company currently faces a 17.0% anti-subsidy tariff on battery-electric vehicles shipped from China, in addition to the EU’s regular car import duty. EU Trade
BYD has been ramping up its European presence. According to Reuters, its facility in Hungary is set to start mass production in 2026, but output will come in under the plant’s original capacity targets. Over in Turkey, BYD’s factory is expected to supply vehicles to Europe that won’t be hit by EU tariffs on entry into the bloc.
Germany isn’t getting any easier for outsiders. BYD’s registrations there shot up 327% in March, yet the brand still holds just a 1.2% market share—Volkswagen sits way out ahead at 17.9%, according to KBA figures cited by Reuters. “Private uptake is starting to bite,” automotive analyst Matthias Schmidt told Reuters, but he also flagged that German manufacturers are countering with quicker product rollouts. Reuters
Europe’s auto race isn’t slowing down. In March, BYD saw registrations jump 147.6% to 37,580 vehicles, Reuters said. Tesla moved ahead of BYD that month, selling 52,600 cars. Volkswagen, Stellantis, and Renault notched up higher sales as well.
The Dresden plant punches above its weight. According to Volkswagen’s site, the factory turned out 165,508 cars—including models like the Phaeton, Bentley Flying Spur, e-Golf, and ID.3—before the last red ID.3 GTX left the line in December.
The risks here are hard to miss. BYD’s supposed talks are thinly sourced, with Volkswagen outright denying them, and there’s no detail on terms, structure, or any political green light. Electrive highlighted another snag: Germany’s reputation may not be enough to outweigh the cost pressures that have already sent Chinese automakers to cheaper hubs like Hungary, Turkey, and Spain.
BYD is feeling the heat. Vehicle sales dropped for the eighth consecutive month in April, Reuters said on May 1—a 15.5% decline year-over-year. On the flip side, overseas deliveries of passenger cars and pickups shot up 35%, reaching 130,000 units.
Dresden is still a Volkswagen location and the innovation campus is only on paper—there’s no official BYD plant coming, at least not yet. But talk keeps swirling, and for good reason: Chinese EV brands are eyeing Europe for production, VW has signaled it’s looking at how to fill underused lines, and sorting out who’s a partner and who’s a competitor isn’t getting any simpler.
