BYD (HKG:1211, SHE:002594) is looking to produce its Europe-bound electric cars locally within three years to avoid tariffs from the European Union, Reuters reported Monday, citing Executive Vice President Stella Li.

The Chinese auto giant is establishing a factory in Hungary that will start production in 2025 and in Turkey in 2026, the report said.

"We are training ourselves to be more European in production," Reuters quoted Li as saying during the IAA Mobility car show in Munich.

Its plug-in hybrids are seen to dominate its European sales in the short term, the news agency said, citing Li.

Shares rose nearly 1% in Hong Kong during Tuesday morning trading.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)