BYD might expand the capacity of its plant in Szeged, Hungary
- QT Advisory
- Mar 1, 2024
- 2 min read
Potential tariff increases might prompt BYD to expand the planned capacity of its new electric vehicle (EV) factory in Hungary, aiming to minimize the reliance on imported cars.
Backed by Warren Buffett, BYD has introduced three models across Europe and is expanding its lineup and sales presence in various countries. Michael Shu, European president of BYD, previously expressed the company's ambition to become one of the leading electric vehicle (EV) sellers in the region by 2030.
He noted that the company's costs are decreasing as it increases its car production. Furthermore, BYD has implemented its own shipping methods, including launching its ship to transport vehicles from China to Europe, thus further reducing costs.
However, the European Commission's inquiry into Chinese competitiveness in the electric vehicle sector is anticipated to result in heightened tariffs.
While potential tariff increases could impact the pace of its expansion, Shu stated, "We are making some preparations... we will try our best to stabilize the sales price of the products in the market." He emphasized the importance of maintaining stable prices for long-term customer relationships and brand image.
Potential tariff increases might prompt the carmaker to expand the planned capacity of its new electric vehicle (EV) factory in Hungary, aiming to minimize the reliance on imported cars, as stated by Shu.
BYD anticipates commencing car production at the plant by the end of next year, an ambitious timeline considering the project was only announced in December. Shu emphasized the rapid pace, noting that in an industry where factories often take four or more years to complete, this timeline is notably accelerated.
The Hungary plant is projected to manufacture a minimum of 150,000 cars annually, a standard capacity for car factories. Shu mentioned ongoing discussions regarding production speed and sales targets, stressing that production must reach at least 150,000 units to maintain cost efficiency.
Investment figures for the project have not been disclosed by BYD, as negotiations with the EU regarding financial support are still ongoing.
BYD has chosen the location for the factory in Szeged, Hungary, due to its proximity to a university that the company views as a potential talent pool. Additionally, the group already operates a battery factory in the country.
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