BYD confirmed Friday that it will build its first European plant for passenger electric vehicles in Hungary, as the Tesla rival continues a rapid overseas expansion. BYD stock rose slightly.
The China EV and battery giant selected the city of Szeged, after months of European countries courting BYD, including Germany and France. BYD already makes EV buses in Hungary. Hungary will provide financial incentives, but the European Union must approve them.
The decision, rumored weeks ago, comes months after the EU opened a probe into subsidies for Chinese-made EVs. As of Dec. 15, France essentially limited EV subsidies to European-made cars as of Dec. 15 That means BYD vehicles, as well as the Tesla Model 3, are no longer eligible.
A European plant also would save on logistics costs, though labor costs are likely to be higher.
BYD will make fully battery electric vehicles (BEVs) as well as plug-in hybrids at the Hungarian plant. The Chinese giant is expected to pass Tesla BEV sales in Q4.
BYD is building a plant in Thailand, which is expected to open in mid-2024. It also recently announced plans for a Brazil factory that could be ready by early 2025. Thailand is a significant BYD market, while the automaker is dominating Brazil's nascent EV field.
Meanwhile, BYD's own RoRo ship for transporting cars should begin operation in mid-2024. All of that should mean that BYD's overseas sales, already substantial, should increase dramatically in late 2024 and into 2025.
That could provide an escape valve for BYD, which is among many EV makers offering substantial discounts in the fiercely competitive China electric vehicle market.
BYD Stock
BYD stock rose 1.1% to 26.35 in Friday's trading after rising 3% on Thursday. But shares have been sliding since July.
Tesla stock was edged up 0.7% to 256.37 on Friday. Shares rose 3% to 254.50 on Thursday. At this point, investors could use Wednesday's high of 259.84 as an early entry.
