Hungary is one of the most important production sites in the German automotive sector. According to data from the World Association of the Automotive Industry, around 437,000 vehicles were produced in Hungary in 2024. This puts the country behind the Czech Republic (1.45 million), Slovakia (one million) and Romania (560,000 vehicles). But Hungary is also a major supplier of internal combustion engines. Against the background of the planned exit from the combustion engine, the recruitment of foreign investments in the electric car sector has been gaining importance for quite some time. So far, the corresponding efforts of the Hungarian government can be assessed as successful. It managed to attract large Chinese battery companies such as CATL, Sunwoda and Eve Energy with extensive investments. Volumed agreements of German car manufacturers with Chinese battery manufacturers contributed to this. A central incentive for investment is state support measures that Hungary offers foreign investors. In August, the EU Commission announced that it had approved Hungarian state aid in the amount of 264 million euros.[ 1]
Among foreign investors in Hungary, Germany was in first place in 2023 with direct investment stocks of 21.3 billion euros by far. The other places were followed by the USA with 9.4 billion euros, France with 5.2 billion euros and China with 4.5 billion euros.[ 2] In addition to extensive state investment incentives, German corporations benefit from comparatively low wages with highly qualified workers. In addition, there is the geographical proximity to Germany as well as a well-developed infrastructure. Hungary thus offers favorable conditions for production within the EU from the point of view of German industry. In 2024, Hungarian wage costs were among the third lowest in the European Union - only Romania and Bulgaria were below it.[ 3] From the perspective of German industry, however, even these wage levels are increasingly considered too high. The Frankfurter Allgemeine Zeitung predicted in mid-2019, Volkswagen would plan new plants in Serbia, Turkey or Bulgaria rather than in Hungary, the Czech Republic or Slovakia in the future. 4] Meanwhile, the Hungarian government is trying to actually limit an increase in real wages due to persistently high inflation - for example, in 2021, when the increase in inflation had completely consumed the increase in the minimum wage.[ 5]
In 2022, BMW succeeded the Audi and Mercedes groups, which were already producing in Hungary, and announced - after several delays - investments of initially over one billion euros for a new plant. This is the most modern BMW plant in the world.[ 6] In the fall of 2022, BMW increased the investment volume to around two billion euros. In addition, the establishment of battery production is planned. BMW obtains the battery cells from the Chinese manufacturers CATL and Eve Energy, which received corresponding large orders. 7] Of the investments, about 1.5 billion euros are accounted for for vehicle production and around 0.5 billion euros for battery production.[ 8] In February of this year, it was announced that all the necessary buildings have been completed in Debrecen.[ 9] The official opening took place in September. At the opening ceremony, Prime Minister Viktor Orbán gave a speech in which he expressed himself critical of the trade conflict between the USA and China. At the same time, Orbán stressed that Hungary would continue to guarantee low tax rates for foreign investors. 10] Although BMW confirmed Orbán's presence at the factory opening, it avoided quoting him in the official press release.[ 11]
Thanks in addition to extensive automotive investments, Hungary is rising to one of the world's largest battery sites. The boom began in 2021 at the latest, when the South Korean manufacturer SK Innovation announced the construction of a new battery factory in Hungary. An investment volume of 2.3 billion US dollars by 2028 is planned. 12] In 2022, the announcement of the world's largest battery manufacturer Contemporary Amperex Technology (CATL) from China to build a factory in Debrecen, eastern Tungaria. CATL is to supply batteries for BMW, Mercedes, Volkswagen and Stellantis, among others. 13] With a volume of around 7.5 billion euros, this is the largest individual investment in the history of Hungary.[ 14] In 2023, further announcements from Chinese battery companies followed: Huayou Cobalt invests around 1.4 billion US dollars in Hungary [15], Sunwoda Electronics another 1.7 billion US dollars [16]. In 2024, Eve Energy announced that it would build its first European plant in Debrecen for around one billion euros in order to supply BMW in the future.[ 17] For this project, BMW received state support of around 34 million euros from the Hungarian government.[ 18]
In addition to the battery manufacturers, the Chinese automobile group BYD also announced at the end of 2023 that it would build its first European vehicle plant in Hungary. The announcement was made following a state visit by Viktor Orbán to China, where he met with BYD founder Wang Chuanfu, among others. The Hungarian plant is not to produce batteries, but for the first time electric vehicles for the European market. 19] In 2025, the announcement followed to expand the site with a development center. BYD aims to sell about half of its vehicles outside China by 2030.[ 20] In Germany, sales of electric cars recently rose again after the collapse in 2024. While the US group Tesla recorded a loss in sales, BYD was able to increase its sales in Germany.[ 21] This means that Chinese competition for the large German car companies is slowly but surely growing in Hungary.
[1] Tobias Piller, Michaela Seiser: With BMW to the stronghold for electric cars. faz.net 06.09.2025.
[2] Magyar Nemzeti Bank (own calculation).
[3] Eurostat: Hourly labor costs. ec.europa.eu 28.03.2025.
[4] Christian Geinitz: Eastern Europe in puberty. Frankfurter Allgemeine Zeitung 08.05.2019.
[5] Munkástanácsok: Óriási csapást mér az árrobbanás a legszegényebb magyarokra. portfolio.hu 07.06.2021.
[6] Markus Fasse: BMW's electric pioneer. Handelsblatt 02.06.2022.
[7] BMW increases investments in new plant in Hungary. handelsblatt.com 11/25/2022.
[8] BMW increases investments. gtai.de 29.11.2022.
[9] Ősszel indul a sorozatgyártás a BMW debreceni üzemében, Szijjártó szerint az egész cég sorsa is múlik ezen. hvg.hu 12.02.2025.
[10] Fidesz: igy kepzeltuk a magyar es a nemet ipar egyuttmukodeset. 26.09.2025.
[11] The newest and most innovative plant of the BMW Group: new production site in Debrecen. press.bmwgroup.com 29.09.2025.
[12] Construction of a factory for electric car batteries. gtai.de 02.02.2021.
[13] Michaela Seiser: China consolidates its power in Hungary. faz.net 09.09.2022.
[14] Henning Peitsmeier, Michaela Seiser: BMW is building a battery factory in Hungary. faz.net 11/25/2022.
[15] Richard Gardham: Deal focus: Huayou takes advantage of Hungary's automotive expertise. investmentmonitor.ai 07.07.2023.
[16] Richard Gardham: Sunwoda Electronic to open first eastern European plant in Hungary. investmentmonitor.ai 31.07.2023.
[17] Chris Randall: Eve Energy to build battery factory in Hungary. electrive.com 10.05.2023.
[18] Henning Peitsmeier, Michaela Seiser: BMW builds a battery factory in Hungary. faz.net 11/25/2022.
[19] EU withholds significantly more money for Hungary. handelsblatt.com 22.12.2023.
[20] BYD is expanding in Hungary. Frankfurter Allgemeine Zeitung 05/17/2025.
[21] Almost 60 percent more electric cars newly registered in November. handelsblatt.com 03.12.2025.