Chinese electric vehicle giant BYD has decided to delay mass production at its new manufacturing plant in Hungary by at least a year, according to a Reuters report. The facility, originally scheduled to begin production next month, will now run below capacity for its first two years, marking a strategic slowdown in the company’s expansion into Europe.
Announced in December 2023, the Hungary plant near Szeged was planned as BYD’s first passenger car manufacturing site on the continent. The project was seen as a cornerstone in BYD’s European strategy, intended to reduce logistics costs, localize production for EU customers, and support the rollout of models like the Seal and Atto 3. The delay, however, reflects broader market uncertainties, including weakening demand for electric vehicles in Europe and growing trade tensions between China and the EU.
Amid this backdrop, BYD is reportedly shifting focus to Turkey, which offers several strategic advantages. Last year, the company signed a $1 billion agreement with Turkey to establish a new factory in Manisa, with a planned annual output of 150,000 vehicles. Turkey’s proximity to China and Europe via the port of Izmir could streamline BYD’s supply chain operations.
In addition, Turkey’s customs union agreement with the European Union presents a potential path to access the European market without incurring EU import tariffs, providing a tactical workaround to increasing regulatory scrutiny and potential trade barriers.
The developments suggest BYD is recalibrating its European ambitions, opting for a more flexible, risk-managed approach amid shifting geopolitical and economic conditions.
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