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China’s BYD is in final negotiations with the Hungarian government to secure a multibillion-euro investment into a new electric car factory, in a deal that could be announced as early as Friday.
The Chinese group plans to manufacture electric cars and batteries at a new site in Szeged, in the south of the country, according to three people briefed on the plans.
BYD already has a bus facility in Hungary, but the company wants a fully fledged car plant to realise its ambition of dominating the European electric vehicle industry by the end of the decade.
It wants to be the biggest seller of EVs “if possible” in Europe, and to account for one in ten battery cars sold in the region by 2030, BYD’s European chief executive Michael Shu told the Financial Times earlier this year.
Discussions between BYD and Hungary were still under way on Thursday, the people added.
BYD and the Hungarian government declined to comment, but Prime Minister Viktor Orbán told a press conference on Thursday that he expected the southern Hungarian region near the city of Szeged to get a big employment boost after big corporate investments.
Hungary has seen investments from leading Chinese investors, especially automotive battery makers, who have brought their own workers to staff the factories. However, Orbán said: “We expect to mobilise hundreds of thousands of potential workers in the Szeged area.”
BYD’s plant would be the first large-scale car factory by a new Chinese brand in Europe. While Nio, Great Wall Motor and others are all targeting the region and are expected to build factories in time, none has yet laid out plans to localise manufacturing.
A host of Chinese brands are looking to take market share in Europe as the continent shifts towards EVs. BYD is the biggest EV producer in China, and earlier this year overtook Tesla as the largest seller of EVs in the world.
The company, in which Warren Buffett’s Berkshire Hathaway is an investor, develops its own batteries in-house.
BYD had shortlisted possible sites in Germany, France, Spain, Poland and Hungary for its first European plant, according to Shu. In China, it has factories under construction capable of making up to 2mn cars a year.
The company was at one point in talks with Ford about buying its plant in Saarlouis in Germany. In October, Ford said a potential buyer for the site had pulled out, without naming the company.
Earlier this year Orbán met BYD chair and founder Wang Chuanfu, Chinese media previously reported.
Hungary has attracted a significant number of new car or battery factories, in part because of its membership of China’s Belt and Road Initiative.
China is the single largest investor in European battery factories, with plants that use Chinese technology being built in the UK, France, Poland and Hungary.
BYD’s expected site at Szeged is close to the Belgrade-Budapest railway line that is under construction by a mixture of Chinese and local firms.
