Business 25 October 2023, 9:10am

Electric vehicle plant to be set up in Hungary, but end product still unclear

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Expropriation procedures have already started in Szeged, southern Hungary for a major investment, news portal G7 reported on Wednesday. The development project will entail "significant and tangible economic stimulus" in terms of its size. The mayor has denied that a battery factory will be built, with several indications that the world's largest electric car producer, China's BYD is the developer, but it is not yet known whether cars or buses will roll off the production lines.

Szuper elektromos autók, amikről még nem is hallottál

Eearlier this week, G7 cited domestic sources in foreign trade in its report on the possibility of a Chinese car factory being built in Hungary. Apparently, the world's largest electric car manufacturer BYD could be involved.

László Botka, mayor of Szeged, confirmed to the newspaper that there is indeed an intention to invest, but he did not give any details, only that it is not a battery factory.

It is probably not by chance that Prime Minister Viktor Orbán held talks in Shenzhen recently with Wang Chuanfu, the founding chairman of BYD, the world's largest electric car manufacturer. At the BYD car factory, the PM was informed about the company's structure and activities in Hungary - the operation of the BYD bus factory in Komárom (northwest Hungary) and the battery assembly plant in Fót (north of Budapest) - and then the latest electric car models produced by BYD were presented.

Last year BYD sold 1.86 million battery-powered cars, making it the world leader in this segment if hybrids are included. According to G7, the carmaker sells its vehicles in 18 countries in Europe, with the aim of becoming one of the top three European electric car manufacturers by 2030.

BYD is potentially considering building two factories in Europe. According to information obtained by the Financial Times this spring, five possible locations are under consideration: Germany, France, Spain, Poland and Hungary. A decision could be made this year, with the aim of starting production by 2025, they say.

The project will be located to the north of the city, near the Béketelep area, just off the M43 motorway. The site covers 300 hectares. For the sake of comparison G7 notes that the Mercedes plant in Kecskemét sprawls on 441 hectares and BMW's plant in Debrecen, which is under construction, will occupy 400 hectares.

The land is currently under agricultural production, on rich soil, and according to the stakeholders, the expropriation process has already started. However, there is a dispute about the price, with the owners are not loving the money offered, which is lower than the expropriation price a decade ago.

There is still a lot of uncertainty around the investment. According to Mfor, a special battery factory near Szeged is also in the pipeline should the new factory produce buses rather than cars. In that case BYD would bring its car production to a 500-hectare site in South Pest.