BEIJING, February 5 (TMTPost)-- China’s leading electric vehicle manufacturer BYD Co. Ltd, took a major step towards its expansion in Europe.

Credit：BYD

BYD has signed a preliminary agreement with the municipal government of Szeged to purchase land for its passenger vehicle production base in the third largest city in Hungary, according to a  statement released by BYD’s official WeChat account. Key figures from both Hungary and China attended the singing ceremony on January 30, including Péter Szijjártó, Minister of Foreign Affairs and Trade of Hungary; László Botka, Mayor of Szeged; Gong Tao, Chinese Ambassador to Hungary; and Wang Chuanfu, Chairman and President of BYD. The agreement marked BYD achieved a significant milestone in its European expansion as the plant is the Chinese EV maker’s first European electric passenger plant.

BYD plans to complete construction of the new plant in Szeged and put into operation within three years, and the plant will mainly produce passenger models sold in the European market. BYD said the plant will make a comprehensive range of electric vehicle (EV) models,without elaborating on the products.

During the ceremony, Minister Szijjártó touted the plant as one of the largest and most significant investments in Hungary’s history. He said that BYD’s decision to locate its first European NEV passenger car factory in Hungary will strengthen the country’s economy, cement its foundation for long-term economic growth and enhance its position in the global electric vehicle transition. Both central and local Hungarian governments will provide comprehensive support for the project and promote the project to come into operation as soon as possible

As the world's largest new energy vehicle (NEV) company, BYD is happy to bring its advanced technology and highly automated production lines to Hungary to help local auto industry’s  transition to electrification, Wang Chuanfu said. Looking forward, BYD will accelerate the creation of products with European brand attributes through localized manufacturing, form closer business exchanges and complementary cooperation with European partners, and work together to promote the industry’s green and low-carbon transformation and global sustainable development, according to Wang.

BYD confirmed late December its plan to build its first production facility for new energy vehicle (NEV) and said the base, which will be constructed in phases, is expected to create thousands of local jobs. The new facility plans to leverage advanced process equipment and highly automated production processes to build the world's leading manufacturing base for NEVs, including including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). The construction of this production base will actively promote the development of the local economy, push forward technological exchanges and innovations between China and Hungary, and help Hungary build a green "ecosystem" with BYD's own advantages in the entire industry chain, a statement of BYD that month said.

Days before the confirmation, Hungarian Prime Minister Viktor Orban said he expects employment of the southern Hungarian region near Szeged will rise following big corporate investments. Orban also assigned 46.3 billion forint (US$133 million) in financing from the budget to upgrade road, rail, power, gas and water infrastructure around an industrial park in Szeged, without naming BYD in the document.

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 last November.

BYD started building its first car plant in Thailand in March. The plant, located in the Eastern Economic Corridor (EEC) special zone in Rayong province, is scheduled to begin production in 2024, with an annual capacity of 150,000 vehicles, It is supposed to serve as a hub for the production and distribution of EVs in Thailand, neighboring ASEAN countries and other regions. BYD also plans to invest US$1.3 billion in Indonesia, including establishment of a new EV plant in Southeast Asia’s biggest economy, according to local official last month. BYD’s Indonesia president Eagle Zhao said the company is on course to begin building the facility later this year and will create a sales network of as many as 50 outlets across Indonesia by the end of the year.