Dresden, May 5, 2026, 13:45 CEST
Volkswagen has rejected reports that China’s BYD wants to take over part of its Gläserne Manufaktur in Dresden, pushing back against speculation over one of Germany’s most symbolic car sites. A Volkswagen spokesperson told BILD the company “firmly rejects” the speculation after German outlets picked up a CarNewsChina report on alleged talks. BILD
The timing matters because the Dresden plant no longer builds cars. Volkswagen ended production there on Dec. 16, 2025, after 24 years and said an innovation campus would be built on part of the site with TU Dresden, while VW would keep the building and its sales and marketing presence.
It also lands days after Volkswagen CEO Oliver Blume told analysts the group could look at sharing European factory capacity with Chinese partners, a delicate idea in a market where Chinese electric-vehicle makers are trying to localise production and European groups are wrestling with idle capacity. Blume said VW would examine whether there were “opportunities” for such partners in Europe. Reuters
The reported plan, first aired by CarNewsChina and then carried by Focus, BILD and Börse Online, centred on BYD using part of the Dresden site to build electric vehicles, or EVs, while the other part would support the planned technology hub with Saxony and TU Dresden. CarNewsChina said BYD declined to comment and Volkswagen denied the report as incorrect.
For BYD, a German production base would have an obvious draw: the “Made in Germany” label and local output inside the European market. The European Union has imposed countervailing duties — anti-subsidy tariffs — of 17.0% on BYD battery-electric vehicles imported from China, on top of the bloc’s standard car import duty. EU Trade
BYD is already building European capacity. Reuters reported last year that the company’s Hungary plant would move to mass production in 2026 at below initial capacity, while its Turkey plant was expected to make cars for Europe without facing EU tariffs when exported into the bloc.
Germany is still a hard market to crack. BYD registrations there surged 327% in March, but its market share was just 1.2%, far behind Volkswagen’s 17.9%, Reuters reported, citing KBA data. Independent automotive analyst Matthias Schmidt told Reuters that the first quarter showed “private uptake is starting to bite,” while warning German carmakers were responding with faster product launches. Reuters
The wider European contest is moving quickly. Reuters reported that BYD registrations in Europe rose 147.6% in March to 37,580 vehicles, while Tesla sold 52,600 and overtook BYD that month; Volkswagen, Stellantis and Renault also posted sales gains.
The Dresden factory carries weight beyond its size. Volkswagen’s official site says 165,508 vehicles were built there, from the Phaeton and Bentley Flying Spur to the e-Golf and ID.3, before the final red ID.3 GTX rolled off the line in December.
But the risks are plain. The reported BYD talks appear to rest on limited sourcing, Volkswagen has denied them, and no terms, structure or political approvals have been confirmed. Electrive also noted that Germany’s prestige may not offset the cost problem that has pushed Chinese makers toward lower-cost production locations such as Hungary, Turkey and Spain.
BYD has its own pressure points. Reuters reported on May 1 that the company’s vehicle sales fell for an eighth straight month in April, down 15.5% from a year earlier, even as overseas sales of passenger vehicles and pickups rose 35% to 130,000 units.
For now, Dresden remains Volkswagen’s site and a planned innovation campus, not a confirmed BYD production base. Still, the rumour has landed because it fits a broader shift: Chinese EV makers want European factories, VW is openly weighing ways to use capacity, and the line between partner and rival is getting harder to draw.
