The Chinese car manufacturer BYD, the world’s number one in building and selling electrified cars, will build a car plant in Hungary as part of its plan to conquer Europe.

“BYD is preparing to build its first car manufacturing plant in Szeged, Hungary, and is hereby making an important step towards green mobility in Europe,” said the manufacturer via its X account BYD Europe.

BYD “hopes to accelerate the introduction of new energy vehicles (NEVs) in the European market, to widen its worldwide presence, and to promote actively the green transformation of the worldwide energy infrastructure,” the message continues.

Electric car specialist Hungary

BYD is already present in Hungary with a bus manufacturing plant. The country is developing into an important player where electric car manufacturing is concerned. The Chinese battery giant CATL is building a gigafactory in the country, and the German premium car producer BMW is building a new assembly plant for its ‘Neue Klasse’ also in Debrecen, Hungary.

The new plant will be built in different steps and will have a place for thousands of workers in the future, confirms the manufacturer. “It will be one of the most important investments in the history of the Hungarian economy,” boasts the Hungarian Foreign Minister Peter Szijjarto. Precise amounts concerning the investment have not been published yet.

The policy of Prime Minister Viktor Orban to “look towards the East” means that a lot of Asian companies have been benefitting from tax cuts, subsidies, and infrastructural compensations to boost Hungarian employment.

Meanwhile, there’s growing criticism about the course Orban is following. People in the neighborhood of the new battery gigafactory from CATL near Debrecen are worried about the ecological and health impact of the plant.

Plants like these need a lot of water, and the Hungarian Lowlands have already suffered from drought for years in a row. Additionally, the example of the Samsung battery factory already operating in Göd is worrying. The plant has already had 12 fines for insecure stocking and disposal of harmful substances.

The most disturbing point, however, is that these new Chinese plants are also mainly manned by Chinese workers. They are poorly housed, and these plants give few additional benefits to the local population, also because there are not enough skilled Hungarian workers to benefit from the job creation. Even loyal member politicians of the ruling Fidesz party of Viktor Orban are now protesting against these evolutions.

Build Your Dreams

That’s what BYD has been doing these recent years. The company started a serious while ago with building batteries but decided in 2003 to develop and build cars. Last year, it halted the production of pure ICE cars and is now concentrating on the manufacture of full-electric cars or hybrids.

The manufacturer is the world’s most important manufacturer of electrified cars and has already produced 5 million units of them since last month. Stock market guru Warren Buffet has been one of the investors in BYD for a long period already.

In 2022, BYD decided to enter the European market with a notable presence at the Paris Motor Show Mondial in October. Ever since, it has been accelerating its presence by starting importation in different European countries and offering an increasing number of models, of which the very affordable Seal and Dolphin are the latest venues.

In Belgium and Luxembourg, the distribution of BYD cars is in the hands of Inchcape, also the importer of Toyota/Lexus here. After having opened showrooms in Brussels and Flanders, Wallonia now follows with dealerships in Charleroi, Namur, and Liège. In total, there are already nine of them in Belux.

Spokesman Thomas De Meûter says that the Chinese brand has already been selling 900 units this year (almost all in the second part of 2023) and that the brand wants to sell 10 000 cars in Belux within 5 years of now.

In contrast with other Chinese makes trying to get a foothold in Europe, BYD is very present in the company car market, selling 70% of its total in that particular (and in Belgium all-important) part of the car market.

Threat to European car makers

Even now, some of its biggest competitors, like Tesla or the German premium three Audi, BMW, and Mercedes-Benz, are dependent on BYD, where the delivery of battery cells or entire battery packs is concerned.

Since 2019, the market share in Europe of Chinese electric car manufacturers has been multiplied by 12. This year, China has overtaken Japan in being the largest car exporter in the world. The entire car sector and its suppliers have been benefitting from generous financial aid from the Chinese government to develop their technology and business.

As well in Europe, as in the U.S., authorities are now investigating this ‘disloyal competition’ and trying to figure out how they can discourage it. It seems odd then that, for example, the German car manufacturers are pleading for a good relationship with China and are trying to avoid big import taxes on Chinese cars. The underlying reason is that they’re too dependent on Chinese supply to be able to show some muscle now.