Spain has prepared a massive €1.3 billion incentive package to accelerate electric vehicle sales. The plan aims to strengthen charging network investments, consumer support, and domestic production.
Spain, which has recently become a focal point for especially Chinese electric vehicle and battery manufacturers, will activate a €1.3 billion incentive package in 2026 to strengthen its automotive industry. According to Prime Minister Pedro Sanchez, the ultimate goal of this plan is for 95% of vehicles produced in the country to be electric by 2035.
Current Production Statistics
Sector data shows that the total share of fully electric and rechargeable hybrids produced in Spain in the first ten months of 2025 is only around 10%. The share of full hybrids is at 26.7%. Last year, the average share of fully electric and PHEV models across the European Union was approximately 20%.
Breakdown of the Plan
Spain’s new plan involves allocating:
- €400 million in direct support to consumers to encourage electric vehicle purchases in 2026,
- €580 million under an EU-funded program supporting industrial investments,
- €300 million to install new stations on road networks where charging infrastructure is still lacking.
The Madrid administration is trying to strengthen the automotive sector against the pressure created by the aggressive presence of fast-growing brands like the Chinese BYD in the European market. Spain’s lack of a strong domestic car brand increases the risk of falling behind in the competition.
Protecting Employment and Position
According to Sanchez, this plan aims to protect employment while production shifts to electrification and to maintain the country’s position as Europe’s second-largest car manufacturer.
While foreign investments, such as the €4 billion battery factory to be established in partnership with CATL and Stellantis, provide job opportunities to the country, the government warns that know-how and market share could be lost if the domestic ecosystem is not supported.
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