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Reply to "Not enough free space" when trying to install XCode even though there's ~7x more free space than required
I had the same issue, and I fixed it through a pretty simple solution. Extracting through an External Hard Drive is possible, but I didn't have one. I only had a 16GB pen drive. My MacBook had only about 30 GB of space. I moved my Xcode file to the 16GB pen drive and I got more space to work. (Which is about 40 GB). But here, there's another issue. I couldn't extract in the pen drive either. The Archive Utility has the option to change the path, where it should be extracted. (In the Archive Utility Preferences) So I changed the path to Macbooks Downloads (Can place which ever location) and extracted from the 16GB Pendrive. It didn't show the not enough space warning this time, and worked perfectly. Later I moved the extracted Xcode file to Applications folder. Try this method, May worked for you too.
Apr ’22