This is why BYD’s $4.6bn Hungary EV plant is falling behind

Chinese electric vehicle (EV) giant BYD will delay large-scale production at its new €4 billion ($4.6 billion) plant in Hungary until 2026, and output will stay below capacity through 2028, according to two people with direct knowledge of the matter.

Instead, BYD will accelerate output in Turkey, where labour and energy are cheaper. According to Reuters, the company’s new $1 billion plant in Manisa, western Turkey, will make more vehicles in 2026 than the Hungarian site despite originally being planned for a later start.

“This is a clear cost-driven move,” said one of the insiders. “Turkey offers a faster route to Europe, without the high wages and tariffs.”

The Szeged plant, announced in 2023 as BYD’s European base, was designed to produce 150,000 vehicles yearly, eventually scaling to 300,000 units. But in its first year, the plant may only roll out tens of thousands of cars.

The shift poses a blow to the European Union, which hoped tariffs on Chinese EVs would lead to job creation within its borders. Instead, Turkey, outside the EU but within the customs union, offers Chinese automakers a back door into Europe, tariff-free.

For BYD, this move reflects balancing global expansion with local cost constraints and political pressure. With EU tariffs on Chinese-made EVs like BYD’s hitting 27%, finding new assembly hubs is vital.

In Turkey, BYD is expected to build several models, including the Seal U, Sealion 5, and plug-in hybrid Seal 06 Dmi. Hungary, by contrast, may begin with Atto 3, Dolphin, and potentially the low-cost Seagull EV.

S&P Global Mobility forecasts BYD’s sales in Europe will more than double this year, hitting 186,000 units, and could reach 400,000 by 2029.

But challenges remain. BYD has struggled with dealer signups, regional hiring, and missteps like offering plug-in hybrids in fully electric markets. It’s also under investigation in Brazil over labour practices related to contractors.

Still, BYD’s rapid pivot shows its hunger to grow globally even if that means shifting plans midstream.

Read more on BYD to triple South African dealerships as electric vehicle sales surge