Chinese leading electric vehicle (EV) and battery manufacturer BYD [1211:HK] has picked Hungary as the location for its first European passenger car factory, as reported by AP News on December 22. The plant, slated to be built in the southern city of Szeged, will produce EVs and plug-in hybrids for the European markets. BYD highlighted the mature infrastructure and a well-established industrial foundation in Hungary, citing them as key factors that led to BYD’s decision to choose Hungary as the center of its European production operations. Hungary’s Foreign Minister, Péter Szijjártó, called the project one of the largest investments in Hungarian economic history, adding that the government will provide financial incentives for the BYD plant.

The plant is expected to further strengthen Hungary’s position in a global transition to electric vehicles (EVs). Over the past five years, the country has attracted an estimated EUR22bn in EV-related investments, including a EUR7.3bn battery plant China’s Contemporary Amperex Technology Co. Ltd (CATL) [300750:CH] is building in the eastern city of Debrecen. BYD’s latest investment signifies the company’s ambition for further overseas expansion, seeking new growth after it reached a sales bottleneck in China’s highly competitive EV market. In addition, setting up a European production base might help the company avoid potential tariff issues, particularly amid the European Commission’s recent anti-subsidy investigation into Chinese automakers.

Sources:

https://apnews.com/article/chinas-byd-building-electric-vehicle-plant-hungary-4c4754f43703d061e1dc02516be0c14a

https://www.byd.com/eu/news-list/BYD_to_Build_A_New_Energy_Passenger_Vehicle_Factory_in_Hungary_for_Localised_Production_in_Europe.html

https://www.bloomberg.com/news/articles/2023-12-22/byd-picks-hungary-for-its-first-european-ev-factory-site

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