Hungary Sees EV Investment Surge as BYD Poised to Set Up Factory

Zoltan Simon and Marton Kasnyik
·2 min read
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(Bloomberg) -- Hungary expects a doubling of foreign direct investment by the end of the decade on a surge in the electric-vehicle industry, with China’s BYD Co. reported to be the latest to build a new factory in the country.

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The jump in Hungary’s FDI stock by 2030 from the current level of €100 billion ($107 billion) will be mainly in EV and battery investments, Economic Development Minister Marton Nagy told a forum in Shanghai, China, according to a ministry statement on Monday.

BYD may provide the latest boost. The company is set to choose Hungary over Germany for the location of its first European plant, the Frankfurter Allgemeine Sonntagszeitung reported over the weekend, citing unidentified people familiar with the plan. BYD will announce its decision by year-end and may build the plant within two years, the German weekly said.

BYD already has a plant in northern Hungary where it assembles electric buses and trucks.

Hungary under Prime Minister Viktor Orban has become one of the leading European hubs for the EV industry, where production facilities help mostly German carmakers such as Mercedes-Benz AG, Volkswagen AG’s Audi and, most recently, BMW AG transition from the era of combustion engines.

Hungary has received an estimated €20 billion of EV-related investments in the past five years, including the €7.3 billion battery plant China’s Contemporary Amperex Technology Co. Ltd. is building in the eastern city of Debrecen. Its output capacity at 100 gigawatt hours will boost Hungary’s battery production to the fourth-highest globally by 2030 behind China, the US and Germany, according to BNEF data.

Orban has pointed to the surge in investments from China as proof that his “eastern opening” approach to attract investments from Beijing and beyond is working. Such investments from Asian nations now account for 34% of FDI, compared with less than 10% before 2010, according to the Economic Development Ministry in Budapest.

The European Union and the US have been critical of Orban’s strategy at a time when much of the West is seeking to reduce its reliance on China, which has come under greater scrutiny as it seeks to extend its global influence.

Orban was the only EU leader to attend China’s Belt and Road Initiative forum last month in Beijing. The Hungarian leader also met with BYD Chairman Wang Chuanfu on the trip.

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