Spain plans to invest nearly €1.3 billion ($1.5 billion) in its electric vehicle industry in 2026, aiming to increase domestic EV production so that 95% of cars made in the country are electric by 2035, Prime Minister Pedro Sanchez announced.

The funding includes €400 million in consumer incentives for EV purchases, €580 million for industrial investment through an EU-supported program, and €300 million to expand charging infrastructure along under-served roads.

The initiative seeks to strengthen Spain’s automotive sector as Chinese EV manufacturers like BYD gain market share, while protecting jobs during the transition to electric production.

Large foreign battery projects, such as CATL’s €4 billion plant with Stellantis, are creating employment, but domestic support is seen as essential to retaining know-how and competitiveness.

Currently, electrified vehicles account for about 10% of Spanish production, with full hybrids making up 26.7%.

Across the EU, around 20% of vehicles sold last year were full-electric or plug-in hybrids. Spain’s long-term goal is for 100% of vehicle sales to be electrified by 2035.