Hungary probes BYD subsidies after ex-minister joins firm
Hungary's government is investigating state subsidies granted to BYD, raising political risk for the Chinese carmaker's European manufacturing strategy after a key negotiator abruptly joined the company.
The Hungarian government will investigate the terms of a major manufacturing investment by BYD after the former foreign minister who negotiated the deal took an executive job at the Chinese electric vehicle giant.
Prime Minister Peter Magyar told lawmakers on Monday that the probe would review all decisions, negotiations and state commitments made by Péter Szijjarto regarding the BYD Hungary investment. Szijjarto resigned from parliament last Wednesday to join the company.
The investigation centres on accusations of a conflict of interest. Magyar said Szijjarto, a close ally of former Prime Minister Viktor Orban, previously assisted the world’s top electric carmaker “with hundreds of billions (of forints) in public money, diplomatic support and state infrastructure.”
For international investors, the inquiry introduces fresh political risk into BYD’s European expansion strategy and Hungary’s broader appeal as an electric vehicle manufacturing hub. Multinational executives typically view Central European subsidies and tax incentives as fixed contractual obligations. A high-level government review of past deals could signal future instability regarding state support for foreign manufacturers.
The review will specifically scrutinise the subsidies, tax breaks, permits, environmental exemptions and publicly funded infrastructure awarded to the BYD project. However, the scope of the investigation extends well beyond a single company. Magyar indicated the government will also examine similar state incentives granted to large multinational corporations throughout Orban’s tenure.
The outcome of this review could force BYD and other foreign firms to reassess the durability of their Hungarian incentive packages. If previously agreed tax breaks or environmental exemptions face retroactive scrutiny, capital expenditure plans for regional factories could be delayed or scaled back.
Neither BYD nor Szijjarto have responded to the specific allegations of a conflict of interest. Szijjarto has publicly dismissed the controversy, describing his new role as a “prestigious” opportunity to work for one of the “greatest success stories” in the global automotive sector.
