BYD, the largest Chinese electric vehicle manufacturer, is planning to build its first European factory in Hungary, according to German newspaper Frankfurter Allgemeine Sonntagszeitung. The decision has reportedly already been internally approved, although no further details about the investment have been mentioned.
The website of the local government in the city where BYD is headquartered recently published a post stating that Hungarian Prime Minister Viktor Orban had visited the company and met with the chairman of the board and president of BYD, Wang Chuan-fu.
BYD has made its way into the top ten largest automakers in the world in terms of sales this year, surpassing German automakers Mercedes-Benz and BMW. In the first half of this year, BYD’s sales of new vehicles increased by 96 percent to 1.25 million cars. BYD stopped producing cars with internal combustion engines last year.
In terms of electric vehicle sales in the second quarter of this year, BYD ranked second behind Tesla, according to the website Electrek. While Tesla delivered 466,000 electric vehicles, BYD sold 352,000. If hybrid vehicles were included, BYD would surpass Tesla with 703,500 vehicles.
BYD announced earlier this year that it will invest three billion Brazilian reais (approximately 14 billion Czech koruna) in building a plant in Brazil, which will be its first plant outside of Asia.
Chinese electric vehicles are still popular in the European market. However, the European Commission is currently investigating the low prices of Chinese electric vehicles, accusing Beijing of flooding global markets with artificially low-priced vehicles due to massive state subsidies.
The investigation, which could result in the imposition of punitive tariffs, has prompted warnings from analysts about retaliatory measures from Beijing and has received a dissenting response from leading Chinese industry executives who argue that the competitive advantage of the industry was not caused by subsidies.
Chinese manufacturers compete with highly competitive prices, while also offering users attractive features. When Laima Springe-Janssen decided to replace her French sports utility vehicle with a gasoline engine with an electric vehicle, she considered models from Swedish brand Volvo and Japanese brand Nissan.
However, the additional features offered by the Volvo electric vehicle would have exceeded her budget, while the Nissan electric vehicles did not offer anything that would have captivated her. In the end, this resident of the Danish capital, Copenhagen, bought a small SUV from Chinese brand BYD, according to the AP news agency.
“I really love this car,” said Springe-Janssen. For a price equivalent to around 1.2 million Czech koruna, she got the BYD Atto 3 model with “all the luxuries,” including a camera that allows a view of the car from five perspectives, two years of free charging, and a set of winter tires. Her husband likes the car so much that he is considering replacing their second car, a Skoda from the Volkswagen Group, with another BYD vehicle.
“I’m sorry, Europe. I have a better offer,” said Springe-Janssen. Her enthusiasm demonstrates how Chinese automakers are winning over drivers and threatening established domestic brands in an industry that is crucial for Europe’s energy transformation.
What challenges and obstacles might BYD face in maintaining compliance with the European Commission’s efforts to tighten regulations, and how can they ensure customer expectations are still met
Y working on stricter regulations and standards for electric vehicles, which could potentially impact BYD’s operations in Europe.
The decision to build a factory in Hungary is seen as a strategic move by BYD to establish a foothold in the European market. The location in Hungary offers several advantages, including its central position within Europe and its well-developed infrastructure.
BYD’s expansion into Europe comes as the company continues to experience strong sales growth. Its move into the top ten automakers globally is a testament to the increasing popularity of electric vehicles. The company’s decision to phase out internal combustion engines further highlights its commitment to sustainable transportation solutions.
In terms of electric vehicle sales, BYD’s performance has been impressive. Its second-quarter sales figures show that it is second only to Tesla in terms of electric vehicle sales. BYD’s success can be attributed to its diverse portfolio, which includes both fully electric vehicles and hybrid models.
BYD’s investment in building a plant in Brazil also demonstrates its global ambitions. This will be the company’s first plant outside of Asia, signaling its intent to expand its presence in international markets.
While Chinese electric vehicles continue to be popular in Europe, the European Commission’s efforts to tighten regulations pose a potential challenge. BYD will need to ensure compliance with these stricter standards to maintain its position and meet customer expectations in the European market.
Overall, BYD’s decision to build a factory in Hungary is a significant step towards establishing its presence in Europe. As the largest Chinese electric vehicle manufacturer and with its strong sales growth, BYD is well-positioned to capitalize on the increasing demand for electric vehicles in the region.