BYD Plays with Europe’s Nerves
This page is translated from the original post "BYD joue avec les nerfs de l’Europe" in French.
- 26/07/2025 13:18
Europe hoped that its tariffs on Chinese electric vehicles would stimulate investments on its soil? BYD proves that this is not a sure thing.
BYD indeed seems to be playing a completely different tune. According to sources close to the matter cited by Reuters, the Chinese electric giant is delaying the large-scale start of its factory in Szeged, Hungary. Initially scheduled for the end of 2025, mass production will ultimately only begin in 2026… and in a very limited manner.
The factory, which cost 4 billion euros, will only produce “a few tens of thousands of cars” in its first year, which is a tiny fraction of its capacity of 150,000 vehicles. Worse, this pace is expected to remain below potential until at least 2028. Yet, Budapest had made a big bet to host BYD’s European headquarters, under the leadership of Viktor Orbán who is always eager to strengthen economic ties with Beijing.
Turkey Licks Its Lips
But while Hungary waits, Turkey is speeding up. The Chinese manufacturer has raised its ambitions at its Manisa factory, originally planned for 2026. It will produce much more than the announced 150,000 units starting in 2027, benefiting from lower labor costs and access to the European market without tariffs, thanks to the EU-Turkey customs union.
This strategic shift to Turkey illustrates the limits of European tariff policy. BYD seeks to evade the taxes (27% in its case) by producing locally, but seems reluctant to bear the higher labor and energy costs within the EU itself.
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Moreover, this maneuver comes as BYD attempts to restructure its European presence after a chaotic launch: an undersized distribution network, a poorly received hybrid offering, and a lack of understanding of local markets.
Nevertheless, demand for its affordable models is exploding: S&P Global expects 186,000 sales in Europe this year, more than double that of 2024. By delaying Hungary but boosting Turkey, BYD raises a crucial question: will Europe really succeed in attracting the investments it hoped for?
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