China’s BYD Announces Plans for EV Factory in Hungary

Chinese automaker BYD announces it plans to establish an electric-vehicle manufacturing plant in Hungary after securing a multibillion-euro investment from the country’s government.

In the announcement, made via the Chinese social media app We Chat, BYD says the new plant will be located in the Hungarian city of Szeged and be constructed in several phases, creating thousands of jobs. Construction is planned to take two years.

The move is part of a European expansion strategy for BYD, which recently revealed plans to establish a battery assembly plant in the northern Hungarian town of Fót.

BYD’s European CEO, Michael Shu, said earlier this year the company wants to account for up to 10% of all EV sales in Europe by 2030.

The plant will use “advanced process equipment and highly automated production processes to build a leading manufacturing base for NEVs,” BYD says.NEVs is a Chinese term used for “New Energy Vehicles,” describing both battery-electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).

BYD began producing electric buses in Hungary earlier this year.

The establishment of a European EV manufacturing plant provides BYD with strategic protection against the possible introduction of import tariffs on Chinese electric vehicles – something that is being discussed by the European Union, which is hearing complaints from established European carmakers that Chinese EV subsidies are allowing Chinese automakers to undercut competitors' prices.

Building the plant should have the double advantage of allowing the automaker to avoid both EU “rules of origin” tariffs as well as France’s recent move to penalize imports from nations with manufacturing processes dominated by fossil fuel energy. Most of Hungary’s energy, like France’s, is produced by zero-emission nuclear plants.

BYD’s plant in Hungary marks the first large-scale car factory in Europe by a Chinese car brand.

Other Chinese automakers, including MG parent SAIC and Great Wall, are eyeing a European production base, but they have yet to detail their plans.

Hungary’s active role in China’s “Belt and Road” initiative has attracted various vehicle and battery factories, with BYD joining the trend.

BMW is constructing a plant in Debrecen, Hungary, to build its upcoming range of electric-powered Neue Klasse models. Chinese battery manufacturer CATL has announced it will build a 100-GWh plant in Debrecen. Chinese automaker Nio has established a factory in Biatorbagy near Budapest to produce battery swap stations.

BYD, China's largest NEV maker, reported sales of 301,903 NEVs in November, including 30,629 sales in markets outside of China.

This year alone, BYD claims 230 retail outlets across 19 European countries. It has introduced five new models spanning the C-to-E segments and including hatchbacks, sedans and SUVs: Han, Tang, Atto 3, Seal (pictured, below) and Dolphin. The automaker adds it plans to launch three new models within the next 12 months.

– with Paul Myles

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