BYD puts Hungarian factory expansion on hold, redirecting investment to Turkey as tariffs and market hurdles reshape its European strategy.
Chinese electric vehicle maker BYD has revised its manufacturing strategy for Europe as it faces market challenges and tariff issues. The company has delayed full-scale production at its new Hungarian plant, now expecting mass output to begin in 2026. Meanwhile, production focus is shifting toward its Turkish facility.
BYD has adjusted its European manufacturing strategy, pushing back the timeline for mass production at its upcoming €4 billion (approximately $4.6 billion) facility in Szeged, Hungary. Large-scale output is now anticipated to begin in 2026, but volumes are expected to stay well below the plant’s designed capacity of 150,000 units annually through at least 2027.
The Hungary facility, initially planned as a key hub for tariff-free EV distribution across the EU, is now facing setbacks due to rising labour and energy costs, along with uncertainty from the European Union’s decision to impose tariffs of up to 27% on electric vehicles imported from China.
At the same time, BYD’s plant in Manisa, Turkey, is set to see increased production, with annual capacity expected to exceed 150,000 vehicles by 2027. This move is part of BYD’s larger effort to expand locally manufactured battery-electric and plug-in hybrid vehicles in the European market.
BYD is also addressing challenges such as limited dealer networks and executive experience in the region. To attract talent, it has raised compensation packages for key hires from established European automakers like Stellantis.
Despite these hurdles, BYD’s affordable pricing and wide range of models are driving growing demand in Europe. Analysts predict BYD’s European sales could nearly double in 2025 to approximately 186,000 units, potentially reaching 400,000 units by 2029.
The company is considering a third European manufacturing site, with Germany as a potential location, though operational costs remain a concern.
This strategy revision underscores BYD’s determination to strengthen its European presence by balancing production efficiency, tariff considerations, and evolving market needs.
