BYD is expected to soon announce a decision about the location of its first European electric car factory.

According to German newspaper The Frankfurter Allgemeine Sonntagszeitung (FAS), via Reuters), the European plant will be built in Hungary. The information is unofficial, based on "unnamed sources close to BYD" who indicate that "the decision had already been made internally."

The article also points out that last month, Hungarian Prime Minister Viktor Orban met BYD Chairman and President Wang Chuanfu.

Well, there are no official comments yet, but the selection of Hungary would not be surprising, as BYD already has an electric bus factory in the country.

Hungary is in the European Union, which would allow the site to produce and sell cars locally in the entire region, without any issues. Let's recall that the European Union opened an anti-subsidy probe into Chinese EVs sold in Europe, which in the future might result in some import tariffs (to support the local automotive industry).

The third element is that Hungary is one of the most favoured countries for various Chinese investments. The world's largest lithium-ion EV battery manufacturer CATL is already building a massive 100-gigawatt-hour factory in the country.

BYD has become the world's largest plug-in electric car manufacturer and, in the third quarter, basically matched Tesla in terms of all-electric car sales volume (the difference was just 3,456 units).

With a record 300,000+ sales a month in October, and surging exports to over 30,000 units last month (roughly 10 percent of the total volume), the Chinese manufacturer is now looking into overseas markets.

BYD Plug-in Electric Car Export - October 2023

At some point, exports will be high enough to justify investment in local production. Additionally, local market requirements often favour local production.

This might be the case also in the U.S., where BYD started with an electric bus factory in California. The Inflation Reduction Act of 2022 (IRA) incentivises local production of electric vehicles and batteries. The question is whether BYD will decide to enter the car segment in North America and where the factory might be – potentially in Mexico, where BYD currently offers electric cars imported from China.