BYD EV plant in Hungary being investigated by EU over potentially unfair Chinese subsidies, reports FT

BYD EV plant in Hungary being investigated by EU over potentially unfair Chinese subsidies, reports FT

According to a report by Financial Times, the European Commission (EC) is investigating whether China provided unfair subsidies for a BYD electric vehicle (EV) plant in Hungary. In December last year, the Chinese automaker announced that it would open its first European EV plant in Szeged.

BYD is expected to invest as much as four billion euros (about RM19 billion) in the southern Hungarian region and create as many as 10,000 jobs. European Union (EU) officials say the factory, which is expected to begin operations this October, was built with Chinese labour and uses mainly imported parts, which creates little economic value for the bloc.

Should the EC find that BYD has benefitted from unfair state aid, it could force it to sell some assets, reduce capacity, repay the subsidy and potentially pay a fine for non-compliance. “It is not surprising — and it is generally known that any investment that takes place in Hungary appears on the commission’s radar very quickly, and the commission follows with redoubled attention every state aid decision that takes place in Hungary,” said Janos Boka, Hungary’s Europe minister.

BYD EV plant in Hungary being investigated by EU over potentially unfair Chinese subsidies, reports FT

The EC implemented the Foreign Subsidies Regulation (FSR) in 2023 to ensure a level playing field for all companies. It led to a trade investigation last year that saw the commission levying tariffs on EVs made in China. Establishing production sites in Europe is a way to circumvent these tariffs.

“In recent years, foreign subsidies appear to have distorted the EU’s internal market, including by providing their recipients with an unfair advantage to acquire companies or obtain public procurement contracts in the EU to the detriment of fair competition,” the commission wrote on its official website.

In addition to Hungary, BYD agreed in July 2024 to invest in a new EV plant located in Turkey which is expected to start production sometime in 2026. Earlier this week, Reuters reports that the Chinese company will announce its third European production site in the next seven to eight months.

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Gerard Lye

Originating from the corporate world with a background in finance and economics, Gerard's strong love for cars led him to take the plunge into the automotive media industry. It was only then did he realise that there are more things to a car than just horsepower count.

 

Comments

  • newme on Mar 20, 2025 at 5:25 pm

    It takes an EU investigation to find out what general public already know. How do you think they managed to sell so cheap?

    Like or Dislike: Thumb up 10 Thumb down 19
    • If you cannot compete, then you blame others for unfair subsidies.

      Like or Dislike: Thumb up 3 Thumb down 1
    • Jerson8964 on Mar 20, 2025 at 8:57 pm

      Dare to cut subsidies? Workers union and public sure going down to street mass protest KEK

      Like or Dislike: Thumb up 1 Thumb down 0
    • Yazidi on Mar 21, 2025 at 9:03 am

      We know and we benefit as consumers. That’s all that matters.

      Like or Dislike: Thumb up 0 Thumb down 0
    • Not to mention not only this year but state subsidies for Decades

      Like or Dislike: Thumb up 0 Thumb down 0
    • Chinese EV on Mar 21, 2025 at 4:15 pm

      Why u dont like cheaper cars? u prefer to buy the same car with higher price? …lets the chinese sells cheap EV, its good for the consumers…ie buyer…ie you & me

      Like or Dislike: Thumb up 1 Thumb down 0
  • You also can subsidize your countryman to let them sell cheap to your people.

    Like or Dislike: Thumb up 1 Thumb down 0
  • ali-x on Mar 22, 2025 at 9:43 am

    sore loser EU – all chinese subsidies, if there are any, will end up subsidising european consumers ultimately – whats so bad about it ???

    Like or Dislike: Thumb up 2 Thumb down 0
  • Pro-Palestine on Mar 26, 2025 at 9:20 am

    Since when subsidies is bad for the people? Pelik kerajaan EU ni. The citizens of Europe should be thanking the chinese gov for the subsidies that their government cannot afford. Penduduk EU diperbodohkan lagi

    Like or Dislike: Thumb up 0 Thumb down 0
 

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