European governments may be wary of budget Chinese electric vehicles flooding their markets, but they're also fiercely competing for a share of the manufacturing investment and jobs the new competitors bring.

While the European Union investigates China's auto subsidies and considers tariffs on imports, national governments across the bloc are dangling their own incentives to attract Chinese automakers looking to build European factories.

Manufacturing costs for Chinese EV makers including BYD, Chery Automobile and state-owned SAIC Motor are much lower at home, but they are nonetheless keen to set up in Europe to build their brands and save on shipping and potential tariffs, said Gianluca Di Loreto, a partner at consultancy firm Bain & Company.