Chinese electric vehicle (EV) manufacturer BYD [1211:HK] is considering Hungary as the location for its inaugural European car plant, as reported by Bloomberg on November 6. Unnamed sources close to BYD, cited by Frankfurter Allgemeine Sonntagszeitung (FAS), indicated that the decision has been internally made. The formal announcement is expected by year-end, with the possibility of plant construction commencing within two years. BYD has already established an all-electric bus plant in northern Hungary and plans to establish a RMB200m (EUR25.7m) battery assembly plant near Budapest. This decision follows a meeting between Hungarian Prime Minister Viktor Orban and BYD Chairman Wang Chuanfu during Orban’s visit to China for the Belt and Road Forum.

Hungary has become a prominent European hub for the EV industry, attracting an estimated EUR20 billion in EV-related investments over the past five years. Viktor Orban’s “eastern opening” strategy, coupled with cost advantages, has made Hungary appealing to investments from China and other Asian countries. In August, leading Chinese battery company CATL [300750:CH] also announced plans to construct a EUR7.3bn battery plant in Hungary, capitalizing on the transition of European automakers toward electrification. The move to establish car factories within Europe is increasingly attractive to Chinese automakers amid the EU’s recent anti-subsidy probe into Chinese EVs sold in Europe, helping them avoid potential tariff issues.

Sources:

https://www.bloomberg.com/news/articles/2023-11-06/hungary-sees-ev-investment-surge-as-byd-poised-to-set-up-factory?srnd=green#xj4y7vzkg

https://insideevs.com/news/694740/report-byd-europe-factory-hungary/

https://www.reuters.com/business/autos-transportation/chinas-catl-build-new-756-bln-battery-plant-hungary-2022-08-12/

BYD moving forward with battery plant in Hungary, working on local hiring, report says