Chinese electric-vehicle maker BYD is reshaping its European manufacturing plans, pushing back mass production at its Hungary facility while fast-tracking a Turkey plant as it grapples with market challenges.
The Shenzhen-based company will delay the start of large-scale production at its Szeged, Hungary factory until 2026, according to South Korean media ZDNet Korea and Reuters. The plant will initially operate at reduced capacity, producing tens of thousands of vehicles before gradually scaling up in 2027, still below original projections.
The Hungary facility represents a EUR4 billion (approx. US$4.7 billion) investment with a planned annual capacity of 300,000 vehicles. Meanwhile, BYD is accelerating its Turkey operations, targeting 500,000 units annually at the plant where labor costs are lower.
The strategic pivot reflects BYD's struggle to crack European markets. The company has faced difficulties recruiting senior executives and dealers with local market expertise. Its initial focus solely on battery-electric vehicles, without hybrid options, proved a miscalculation in markets with limited charging infrastructure and lower EV adoption rates.
BYD has responded by offering premium salaries to poach talent from European automakers, including Stellantis NV, Reuters previously reported. The production adjustments signal a broader recalibration of its European approach.
Currently, all BYD vehicles sold in Europe are manufactured in China and face a 27% EU tariff on Chinese-made EVs. The Hungary plant is crucial for local production to circumvent import duties, though high European labor and manufacturing costs have prompted a more measured investment timeline.
The revised production schedule may disappoint EU officials who had hoped Chinese investment would boost local employment. BYD's cautious approach underscores the challenges facing Chinese automakers expanding into mature Western markets.
Article edited by Jack Wu
