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BYD is in final talks to with the Hungarian government over a multi-billion-euro investment in a new EV factory, and could announce the deal as soon as Friday, the Financial Times reported. BYD wants to produce EVs and batteries in the factory located in Szeged, the third largest city in Hungary, the reported cited people briefed on the plans. The report suggested the new plant is part of BYD’s efforts to dominate the European EV industry by end of the decade.

BYD and Budapest didn’t respond to the report or other media’s request for comment on it. While the negotiation was said to be under way on Thursday, the same day saw Hungarian Prime Minister Viktor Orban said he expects employment of the southern Hungarian region near Szeged will rise following big corporate investments.

If the report is accurate, the factory would be BYD’s first EV production base in Europe and the second automobile facility in Hungary as the company has one for making bus there. More than a month earlier, Frankfurter Allgemeine Sonntagszeitung (FAS) reported BYD has made a decision internally about a plan to set up a factory in Hungary. 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. 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.

The reported investment in new facility in Hungary underscores BYD is seeking to accelerate overseas expansion to offset slowdown in domestic market.

The Shenzhen-based manufactuerer said it sold 301,903 new energy vehicles (NEVs), including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), in November, breaking sales record for seven straight months after sales first topped a 300,000-unit milestone in October. While sales rose about 31% year-over-year (YoY) in November, the volume nearly flat from the previous month. The company maintained robust overseas expansion. Sales in markets beyond China first exceeded 30,000 units in November.

Global BEVs unit sales increased 29% YoY in the third quarter of 2023, and sales in China, as the No.1 market for BEVs, only grew 11%, below the average, according to data from Counterpoint Research last week. However, the international market research firm estimated Chinese brands sold over 0.13 million BEVs abroad that quarter, marking a fourfold increase from a year earlier. BYD’s sales has caught up with Tesla as their sales share of 17% ranked the first place that quarter. Counterpoint expected BYD will surpass Tesla by BEV sales in the fourth quarter.

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