BYD Co wants to build a third factory in Europe to expand in the region that has hiked tariffs on electric-vehicle (EV) imports from China.

A decision on a possible location may come in the next year and a half, executive vice-president Stella Li told reporters on Friday in Frankfurt. The Atto 3 maker is preparing to start production later this year at a factory in Hungary, with another site in the works in Türkiye.

The company is also planning to produce EV batteries in Europe, Li said, adding that the location of a potential site and timing are still being discussed.

BYD has been clear about its ambition to expand local production in Europe, which will help it avoid higher tariffs that came into force for Chinese EV makers last year. The Asian country’s share of new EV sales in the region has stalled since the European Union imposed additional tariffs on imports.

Still, BYD strengthened its position as China’s top entry in Europe in recent months, outselling SAIC Motor Corp’s MG by 44% in January, according to data from auto research group Jato Dynamics.

Despite a slowdown in demand for EVs, Europe remains attractive for Chinese carmakers, because they can generally command higher prices there than at home, where they have been locked in a painful price war.

To aid its European push, BYD has been on a hiring spree in recent months, poaching executives from Jeep maker Stellantis NV.