BEIJING, November 8 (TMTPost)— China’s No.1 electric vehicle (EV) manufacturer BYD Co. Ltd seems accelerate expansion in Europe despite new probe targeting EV exports there.

Credit：Visual China

BYD has made a decision internally about a plan to set up its first European car factory in Hungary, Frankfurter Allgemeine Sonntagszeitung (FAS) cited anonymous sources close to BYD. The German newspaper said BYD will announce the decision by the end of this year and may establish the plant within two years.

BYD later said it is still looking for the right location and would make relevant announcement by the year end. The Hungarian government didn’t respond to request for comment. However, Reuters found a clue that suggested BYD could have an interest in Hungary as the local government of Shenzhen, where BYD is headquartered, published an article at its website last month. According to the article, Hungarian Prime Minister Viktor Orban met BYD Chairman and CEO Wang Chuanfu. Orban, as the only EU leader who attended China’s Belt and Road Initiative forum n Beijing last month, met with BYD head during his visit to China that month.

Under the leadership of Orban, Hungary has been developed into one of the leading European hubs for the EV industry. Established automakers like Mercedes-Benz, Audi and Suzuki have car plants in the country. BMW is investing 2 billion euros (US$2.2 billion) in new battery and assembly operations for the Neue Klasse, its next generation EV platform, at a plant in Hungary, one of the first facilities to start building the Neue Klasse vehicles. The plant is scheduled to kick off production in 2025.

Hungary has received an estimated 20 billion euros of EV-related investments in the past five years, including 7.3 billion euros from China’s top EV battery maker Contemporary Amperex Technology Co. Ltd. (CATL) for a plant that is under construction in Debrecen, Hungary’s second largest city after Budapest. Hungary expects its foreign direct investment (FDI) will double from the current 100 euros by 2030 and the jump in FDI stock will be mainly in EV and battery investments, Economic Development Minister Marton Nagy said at a forum in Shanghai earlier this week.

The recent news showcased BYD continued its efforts to make EVs locally in Europe. Earlier this year, BYD was reported to take over a Ford plant as its first production base in Europe. Ford is talking with BYD to sell its manufacturing plant and its German management plans to visit for the sales, the Wall Street Journal cited sources in January. The plant, located in Saarlouis, a city in state Saarland at southwestern Germany, is said to be scheduled to end production in 2025. The discussion is reportedly at early stage and may ultimately fall through. While not revealing whether BYD was involved or not, a spokesperson at Ford later said the company was discussing with “a number of potential buyers and have nothing further to add at this time.”

BYD Executive Vice President Stella Li suggested in February that the Chinese EV giant is more likely to build its own plant than acquire one from Ford. “We are not focusing on certain companies’ facilities,” said Li. She added that BYD is doing feasibility studies to see plans for the future, such as what the best solution is if it sets up facility in that region.

News about BYD’s possible EV plant in Hungary came as EU officially launched an anti-subsidy probe into EVs from China at the beginning of October.

The European Commission will decide whether to impose tariffs more than the current 10% standard rate for cars in the coming 13 months. The possible tariff will affect not just Chinese automakers but also foreign brands that produce vehicles there such as Tesla, Renault and BMW. The move may result in tariffs close to the 27.5% level already imposed by the U.S. on Chinese EVs, Bloomberg cited people familiar with the matter following European Commission President Ursula von der Leyen’s announcing EU will take action. Caixin learned last week that BYD, SAIC Group and Geely were among automakers being investigated.