As the global electric vehicle (EV) market continues to expand, manufacturers are strategizing to tap into the immense potential of the European sector. BYD, a leading player in the EV domain, is rumoured to be considering Hungary as the location for its first European car factory.

BYD Seal

Electric Vehicle (EV)

BYD to build its first European electric car factory in Hungary

  • The decision has already been made internally, according to unnamed sources close to BYD.
  • Hungarian Prime Minister Viktor Orban met Chairman and President Wang Chuanfu last month.
  • Hungary is a member of the European Union, which would allow the site to produce and sell cars locally in the entire region.
  • Hungary is one of the most favoured countries for Chinese investments.
  • BYD has become the world’s largest plug-in electric car manufacturer and is now looking into overseas markets.
  • With exports surging to over 30,000 units last month, BYD is now looking into local production.


The choice, while unofficial, aligns with several strategic considerations, including political alliances, market dynamics, and economic incentives. This article delves into the multifaceted reasons that might be driving BYD’s potential decision.

  • Strategic Location: The potential decision to establish a car factory in Hungary would be a significant move for BYD in the European market. Being a member of the European Union, Hungary serves as a strategic location, allowing for the production and distribution of vehicles throughout the EU without any major regulatory barriers.

European Union (EU)

  • Existing Presence: Its existing electric bus factory in Hungary suggests that the company is already familiar with the Hungarian market, its regulations, workforce, and other factors that would influence such a decision.
  • Political and Economic Context: The meeting between Hungarian Prime Minister Viktor Orban and Chairman and President Wang Chuanfu could imply high-level discussions and possibly incentives or assurances provided by the Hungarian government to BYD.
  • Competitive Landscape: With the EU initiating an anti-subsidy probe into Chinese EVs, BYD might be preemptively avoiding potential future tariffs by manufacturing within the EU. This approach would ensure competitive pricing for their products.

Chinese Investments

  • Chinese Investments in Hungary: Hungary’s track record of attracting Chinese investments, such as CATL’s large battery factory, showcases the country’s strategic importance for Chinese firms looking to make inroads into Europe.
  • BYD’s Growth: BYD’s rapid growth in plug-in electric car manufacturing and its close competition with Tesla indicate a growing and ambitious company. Their expanding export numbers reinforce this, showing that they are eager to tap into international markets.

Local Production

  • Local Production: The importance of local production cannot be understated. As BYD’s exports increase, the economics and logistics favour localized manufacturing. Additionally, understanding local market requirements and adapting to them becomes easier with local production.
  • Expansion into North America: The company’s electric bus factory in California and the new policies like the Inflation Reduction Act of 2022 emphasize local EV and battery production. The company might be analyzing the feasibility of expanding its vehicle segment in North America, potentially capitalizing on favourable regulatory conditions and market opportunities.


BYD’s potential move to set up a car factory in Hungary seems to be a strategic one, considering the economic, political, and competitive landscape. It will be interesting to monitor their further decisions, including any potential ventures into the North American market.

BYD’s speculated move to establish a factory in Hungary underscores the intricate interplay of geopolitics, economic strategy, and market dynamics in the fast-evolving electric vehicle industry. As the company continues to grow and navigate the global landscape, decisions like these reflect the need for foresight, adaptability, and keen understanding of regional nuances. As it potentially expands its footprint in Europe and potentially North America, it sets the stage for a more interconnected and competitive global EV market.


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