BYD's Szeged gigafactory delayed, Chinese company to produce fewer cars in Hungary

China's BYD will start mass production at its Hungarian electric car factory only in 2026, and the plant will operate below planned capacity in the first two years, insider sources told Reuters.

The Szeged plant, representing a EUR 4 billion investment, will commence mass production in 2026, but in the first year, it will only produce tens of thousands of vehicles, a fraction of the initial 150,000-unit capacity.

The factory's final capacity would be 300,000 cars annually.

BYD announced it would begin operations in Szeged in October but has not publicly disclosed when mass production would start. Sources say production will increase in 2027 but will still remain below planned capacity.

Focus shifted to a facility in Türkiye

While Hungarian production is delayed, BYD's Turkish facility will start production ahead of schedule. The USD 1 billion Manisa plant, originally set to launch in late 2026 with an annual capacity of 150,000 cars,

will produce more vehicles next year than the Hungarian facility.

According to sources, Turkish production will significantly exceed 150,000 cars in 2027, with another substantial increase in output planned for 2028.

BYD is building the Hungarian plant to sell cars duty-free in Europe. Currently, all BYD cars sold in Europe are manufactured in China and face EU anti-dumping duties in addition to the standard 10% tariff, totalling 27% for BYD.

Most cars produced at the Turkish facility will also be destined for Europe and can be exported duty-free to the EU.

The shift towards Turkish production highlights the challenge Chinese automakers face: they want to manufacture in Europe to avoid punitive tariffs but are deterred by the region's higher wage and energy costs. Turkey has long served as a low-cost manufacturing hub for major automakers including Toyota, Stellantis, Ford, Hyundai, and Renault. In March, the Turkish government announced that Chinese Chery would invest USD 1 billion in a plant producing 200,000 vehicles annually.

BYD's European sales are growing rapidly. S&P Global Mobility estimates the Chinese automaker will sell 186,000 vehicles in Europe this year, up from 83,000 in 2024, with sales expected to double to nearly 400,000 units by 2029.

Source: Reuters

Cover photo (for illustration purposes only): Getty Images