Chinese electric-car specialist BYD has announced plans to build a factory in Hungary, making it the first Chinese car manufacturer to produce passenger cars from start to finish in Europe. The move comes amid a European Union investigation into the low prices of Chinese-built electric cars on the continent.
The new factory, located in Szeged, Hungary, is expected to create thousands of local jobs and will be constructed in phases. This marks the first instance of a Chinese car maker establishing a brand-new, passenger-car factory in mainland Europe capable of producing cars entirely on-site.
Unlike previous Chinese car manufacturing ventures in Europe, such as MG’s operation in the UK and Great Wall Motors’ facility in Bulgaria, which involved completing partially assembled vehicles shipped from China, BYD’s factory will build cars from start to finish.
The move by Chinese car brands to establish manufacturing facilities in Europe comes in response to fears of potential tariffs on Chinese-made electric cars by the European Union. The EU has initiated an investigation into the alleged artificial suppression of prices of Chinese electric cars through substantial state subsidies.
While European-built vehicles are expected to be more expensive to manufacture than their Chinese-made counterparts, they would avoid a 10% import tariff and could be tailored to better suit European preferences.
The new BYD passenger-vehicle factory in Hungary is situated close to an existing BYD electric bus factory in northern Hungary and in proximity to the Slovakian border. Notably, several well-known car models sold in Australia, including the Audi TT and Q3, Mercedes-Benz CLA and EQB, and Suzuki S-Cross and Vitara, are manufactured in Hungary. Additionally, BMW is in the process of constructing a factory in Hungary for its upcoming ‘Neue Klasse’ electric cars set to debut in 2025.
However, BYD has not yet disclosed the commencement date for construction or the opening date of the new Hungarian factory, nor has it announced which vehicles will be produced at the facility.
