- BYD will delay mass production at its Hungarian EV plant until 2026 and will operate the plant below capacity for at least the first 2 years, according to Reuters.
- BYD will start production at its factory in Turkey earlier than expected, where labor costs are lower, and output will significantly exceed its announced production plan.
BYD (HKG: 1211, OTCMKTS: BYDDY) is reportedly delaying mass production at its Hungarian plant and favoring an earlier start-up of production at its Turkish plant, amid cost considerations.
The company will delay mass production at its new electric vehicle (EV) plant in Hungary until 2026 and will operate the plant below capacity for at least the first two years, Reuters said in a report today, citing two people familiar with the matter.
BYD's 4 billion euro ($4.64 billion) plant in Szeged, southern Hungary, will start mass production in 2026, but will produce only a few tens of thousands of units over the whole year, these sources said.
That's just a fraction of the plant's initial capacity of 150,000 units, which should eventually max out at 300,000 units per year, the report notes.
Production at the Szeged plant is expected to increase in 2027, but will still be below planned capacity, these sources said.
BYD announced in December 2023 that it would build a passenger new energy vehicle (NEV) production site in Szeged, Hungary, its first in Europe.
The company signed a land pre-purchase agreement with the Szeged government on January 30, 2024, saying at the time that the plant would be up and running within three years and would mainly produce passenger car models sold in Europe.
BYD had planned to install production line machinery at the Szeged plant by September, but in recent months it has delayed the installation of the line, which is being built at one of its manufacturing centers in China, according to the Reuters report today.
Over the past year, BYD executives have mentioned the possibility of producing several different models at the plant, including the Atto 2, Atto 3 and Dolphin.
One source told Reuters that BYD would build the Atto 3 and Dolphin there, as well as the upcoming low-cost Seagull model; another source said BYD would build the Atto 2, Atto 3 and Dolphin there.
Meanwhile, one source said BYD will start production earlier than expected at its new plant in Turkey, where labor costs are lower and output will significantly exceed its announced production plans, according to Reuters.
Moving production from Hungary to Turkey would be a setback for the EU, which has been hoping to attract Chinese investment and high-paying manufacturing jobs by imposing tariffs on Chinese-made EVs, the report notes.
BYD's $1 billion plant in Turkey, which was scheduled to start production at the end of 2026 with a capacity of 150,000 units a year, will make more cars than the Hungarian plant next year, a source said.
By 2027, the Turkish plant will be producing well over 150,000 vehicles, and it will ramp up significantly again in 2028, the source added.
Many of the cars produced at the new Turkish plant will also be sold in Europe and exported to the European Union without paying tariffs, the Reuters report notes.
The shift to cheaper production in Turkey will highlight the challenges faced by Chinese carmakers who want to build cars in Europe to avoid punitive tariffs but are deterred by the region's higher wages and energy costs, Reuters says.
The EU ended an anti-subsidy investigation into battery electric vehicle (BEV) imports from China last October and began a five-year policy of additional tariffs.
Different carmakers face different tariff rates, with BYD at 17.0 percent. These tariffs are in addition to the original 10 percent.
In Turkey, BYD will produce the all-electric Seal U SUV, as well as the Sealion 5, although it is unclear whether it will be an all-electric or plug-in hybrid version, and two plug-in hybrid models, the Seal U DM-i and the Seal 06 DM-i, Reuters says, citing a source.
BYD announced in July 2024 that it would invest about $1 billion in an NEV production site in Turkey with a planned annual capacity of 150,000 units, which would become operational by the end of 2026.
In addition to the NEV plant, BYD will also build a research and development center in Turkey.
