BYD plans Q4 mass production start at its Szeged plant in Hungary

BYD said it plans to begin mass production at the plant in the fourth quarter, the October report said. Executive vice president Stella Li told Reuters in June that vehicle assembly would begin in the fourth quarter, with equipment still being installed. Management told analysts on 7 September that it expected assembly to begin in November or December.

The plant is designed for 200,000 vehicles a year at full ramp, though BYD has said output will run well below capacity for at least two years. Earlier reports described an initial annual capacity of about 150,000 vehicles. Trial production began on 29 January with 960 employees, most of them local hires plus some temporary staff from Asia, and the Dolphin Surf is expected to be the first model built there.

BYD has been in Hungary since 2016, when it opened an electric bus assembly plant at Komárom, and moved its European headquarters to Budapest last year. The Manisa plant in Turkey, announced in 2024 and sized for 150,000 vehicles a year, is on indefinite hold.

Why local assembly matters

The EU applies a combined 27% tariff on China-built battery electric vehicles, a 17% countervailing duty on top of the standard 10% import tariff. Building locally would allow the company to sidestep those levies.

Local content is the second pressure. The EU's draft Industrial Accelerator Act would set a threshold of about 70% local content for subsidies and public procurement, a figure still in square brackets when the proposal was published in February. Altavilla's case for a battery plant is simple: "It does not make sense to invest in car assembly (in Europe) but bring batteries from China," he said in September 2025. Trade pressure is widening too: the EU is seeking a negotiated limit on imports of China-made hybrids and could raise tariffs if no agreement is reached, the Financial Times reported.

Three assembly plants and one battery plant

Alfredo Altavilla, BYD's special adviser for Europe and a former Fiat Chrysler executive, said at a presentation in Turin on 16 September that the company will need three vehicle assembly plants and one battery factory in Europe over the longer term. "Over the longer term, we will need three assembly plants and one battery plant," he said. BYD expects to decide on a second European assembly site by the end of 2026, and prefers to acquire and refurbish an existing facility rather than build from scratch. Spain and France are among the preferred locations.

Italy remains a candidate but is less likely to be chosen, Altavilla said: "Italy remains a plan B". A year ago, at a conference in Milan, he told Reuters it was "hard to imagine" a plant in countries "not friendly with Chinese cars", noting that Rome had backed the EU's tariffs on Chinese electric vehicles. BYD has since been negotiating with Stellantis and other European automakers about taking over underutilised factories. Stella Li said in May that BYD would prefer to operate any acquired plants on its own rather than through joint ventures.

The overseas sales engine behind the plan

BYD needs the capacity because China is shrinking for it: sales at home fell 32.7% to 1.505 million vehicles this year. Overseas sales reached 1,162,260 in the first eight months of 2026, up 85.72% year on year. August alone set a record of 189,466, up 134.45% and 43.03% of the monthly total.

The company raised its 2026 overseas target to between 1.9 million and 2.0 million vehicles, from 1.5 million set in March, itself up from 1.3 million in January, and targets more than 2.5 million in 2027. European registrations rose 169.7% to 50,646 in the first quarter, lifting market share to 1.8% from 0.7%. In the first half it registered 174,144 vehicles across the EU, EFTA and Britain, ahead of Tesla's 170,351, with EU share up to 2.4% from 1.0%, according to ACEA data. Overseas revenue passed domestic revenue for the first time, at 53% of the total.

What happens next

After the second site is chosen, BYD must decide whether to prioritise a third assembly plant or a battery factory, with energy costs weighing heavily, Altavilla has said. Management sees shipping capacity, not manufacturing, as the constraint on exports this year, according to a Deutsche Bank note. As many as 26 Chinese-owned EV and battery plants are under construction or operating in Europe.