David Morris

Opinion | Hungary is becoming Europe’s electric vehicle hub – by courting Chinese carmakers

Already a host for European carmakers switching to EVs, Hungary’s welcoming of major Chinese carmakers such as BYD will boost its ambition of becoming Europe’s EV manufacturing centre

Reading Time:3 minutes

Why you can trust SCMP

Vehicle carrier vessel “BYD Explor No 1” arrives at Xiaomo International Logistics Port in Shenzhen on January14, 2024. The vehicle carrier vessel set sail for the ports of Vlissingen in the Netherlands and Bremerhaven in Germany with more than 5,000 new energy vehicles on board. Photo: Xinhua

David Morris

Published: 7:30pm, 18 Jan 2024Updated: 8:14pm, 18 Jan 2024

Chinese electric vehicle maker BYD’s investment in a major manufacturing base in Hungary has sparked concerns about a “China threat” at the heart of Europe. More likely, it marks a green tipping point for the European car market and a smart strategy by Hungary to become an EV hub.

Europe has long produced the world’s most sought-after luxury cars, but has been slow to make the transition to EVs. Meanwhile, China has become the new powerhouse in the green transition in the automobile sector, just as it has led the world in the shift to renewable energy. Last year, BYD surpassed Tesla to become the world’s bestselling EV producer.

Now BYD is planning a major European manufacturing base in Szeged in southern Hungary, near the border with Serbia. This is in the European corridor of China’s Belt and Road Initiative, with a new rail link being constructed between Belgrade and Budapest to connect Piraeus port in Greece to deep central Europe.

The fast rail project has been controversial, with the European Commission suspicious of its lack of transparency. The BYD investment appears to demonstrate that the rail project will nevertheless generate new industrial development for the economies of central and eastern Europe.

BYD’s announcement has been described by some commentators and a range of voices in the Hungarian community as a “China threat”. Such responses reveal a combination of economic competitiveness and geopolitical fear.

At a recent debate hosted by the conservative Common Sense Society, even supporters of Hungary’s nationalist government were almost unanimous in considering that the risks of major Chinese investments outweighed the benefits. It’s part of a trend of European opposition to economic interdependence with China.

03:15

China-made battery plant upsets local residents in Hungary, triggering protests