Samsung SDI and SK On, two of the three major battery companies in South Korea, have factories in Hungary, which is expected to become a battleground for targeting the European battery market.

According to industry sources on the 20th, BYD, the world's largest electric vehicle company, announced its plan to establish a European headquarters during a joint press conference with Hungarian Prime Minister Viktor Orbán in Budapest. BYD entered Hungary in 2016 by setting up an electric bus production plant in Komárom. Now, it is building its first electric vehicle plant in Europe in Szeged, Hungary, with an annual production capacity of 200,000 vehicles. The plant is set to be operational by the end of this year.

Overview of Samsung SDI's electric vehicle battery production plant in Hungary. / Courtesy of Samsung SDI

China's CATL, the world's largest battery manufacturer, announced plans to invest €7.3 billion (approximately 11.4 trillion won) to establish a production plant with a capacity of 100 GWh in Debrecen, Hungary, in 2022. At that time, it was the largest amount of foreign investment in Hungary. The plant is expected to be completed by 2027.

South Korean battery companies are also operating battery plants in Hungary aimed at the European market. Samsung SDI has been producing batteries at its Hungarian plant since 2017. The facility was previously used for Samsung SDI's Plasma Display Panel (PDP) plant in the early 2000s and was converted into a battery plant. Since then, Samsung SDI has also started producing batteries at its second Hungarian plant from 2023. SK On has three factories in Hungary. Operations at the first plant began in 2020, followed by the second plant in 2022 and the third plant starting in 2024.

The reason battery companies are flocking to Hungary is that it is one of the hubs for electric vehicle manufacturing in Europe. Three German car manufacturers—Audi, BMW, and Mercedes-Benz—are producing or planning to produce electric vehicles in Hungary.

Audi first entered Hungary in 1998 and has been producing electric motors since 2018. It plans to manufacture electric vehicles in Hungary starting in 2029. Mercedes-Benz has been assembling electric vehicles in Hungary since 2021. BMW announced plans to invest €1 billion in Hungary in 2018 and is expected to begin electric vehicle production there this year.

A battery industry official noted that "it is common to set up battery plants near vehicle manufacturing plants to reduce logistics costs, as automotive batteries are heavy."

Hungary announced its ‘National Battery Industry Strategy 2030’ in September 2022, aiming to be at the center of the European battery supply chain by 2030. The Hungarian government designates battery-related manufacturers investing locally as part of a national strategic business, providing subsidies and tax reductions.

Minister Péter Szijjártó said in an interview with local media last April, "We have invested €3.8 billion (approximately 6.1934 trillion won) in the electric vehicle battery industry following COVID-19."