Hungary has launched an investigation into state support for BYD's (HKG:1211, SHE:002594) investment after former Foreign Minister Péter Szijjártó left government to join the Chinese automaker as an executive.
Prime Minister Péter Magyar told lawmakers on Monday that authorities will review decisions, negotiations and state commitments related to BYD's investment approved during the previous government.
The probe will examine subsidies, tax breaks, permits, environmental exemptions and publicly funded infrastructure provided for the Chinese automaker.
Magyar alleged Szijjártó helped BYD expand in Hungary with "hundreds of billions" of forints in public funding, diplomatic backing and state infrastructure while in office.
"We will examine all the decisions, negotiations and state commitments made by Péter Szijjártó that were related to the BYD Hungary investment," the Associated Press quoted Magyar as saying.
He added the investigation would examine whether professional warnings were ignored and what costs the projects imposed on taxpayers, workers, local communities and the environment.
BYD and Hungary's Prime Minister's Office did not immediately respond to' requests for comment.
Szijjártó, who resigned from parliament last week to join BYD, has described his new role as a prestigious opportunity to work for one of the automotive industry's biggest success stories.
The probe comes as BYD has rapidly expanded its footprint in Hungary, making the country the centerpiece of its European manufacturing and research strategy.
While serving in government, Szijjártó played a key role in attracting Chinese investment to Hungary, including BYD's first European passenger vehicle plant in Szeged, announced in 2023.
The factory, which BYD has said will begin assembling vehicles in the fourth quarter of this year, is the company's first passenger car manufacturing plant in Europe.
In 2025, Szijjártó also announced that BYD would establish its European headquarters and a research and development center in Budapest with 20 billion forints in government support.
The headquarters is expected to create about 2,000 high-value jobs and serve as the hub for BYD's European sales, after-sales services, vehicle certification, testing and localized vehicle development.
On June 27, BYD announced a 75.7 million euro investment to expand its electric bus factory in Komárom to manufacture electric trucks, creating 620 jobs.
The project will triple the plant's annual production capacity to 1,250 buses and trucks, further expanding BYD's manufacturing footprint in Hungary.
"Hungary is the number one priority right now," BYD Executive Vice President Stella Li told Reuters in June, adding that the automaker was prioritizing production in Europe as it paused work on a planned factory in Turkey.
BYD's sales in Europe surged 270% in 2025 to nearly 188,000 vehicles, while sales rose 144% year to date through May to more than 100,000 units.
Expanding production in Hungary would also help the Chinese automaker avoid European Union tariffs on electric vehicles imported from China.
Although BYD announced plans in 2024 to invest $1 billion in a vehicle plant in Turkey, Li said construction has not started, and the project remains on hold with no timeline for production, according to a Reuters report.
The investments form part of Hungary's strategy to become a European hub for electric vehicle and battery manufacturing by attracting Chinese automakers and battery producers.
The policy has drawn criticism from opposition politicians, environmental groups and local communities over concerns about public spending, environmental risks and the country's growing economic dependence on China.
