Hungary's New Government Plans to Crack Down on Environmental Violations and Raise Taxes — Chinese EV Companies Face a Test
Hungary’s $20 billion electric vehicle industry, long protected by former Prime Minister Viktor Orban, is now facing a reckoning: the country’s new government is moving to crack down on environmental violations and plans to increase taxation.
According to Bloomberg, Hungarian Prime Minister Peter Magyar said Friday evening that the government intends to introduce the strictest environmental regulations in the EU, raise taxes on polluting enterprises, and abolish large tax incentives previously granted to multinational corporations. He emphasized these measures are part of a comprehensive reform aimed at rebalancing the corporate tax system.
This move has particularly drawn attention from Chinese companies. Chinese firms have viewed Hungary as a gateway to the EU market and have made substantial investments there—establishing several large battery factories locally and setting up BYD’s first factory within the EU. These companies have also been major beneficiaries of Hungarian government subsidies.
Magyar secured a decisive victory in the April election, partly due to widespread public opposition to battery plants and growing concerns about land, air, and water pollution—issues stemming from weak regulatory enforcement during Orban’s 16-year rule. One of Orban’s first actions after reclaiming power in 2010 was to abolish the Ministry of Environment.
On Wednesday, Peter Szijjarto, Hungary’s former foreign minister and an ally of Orban, announced he was stepping down from his parliamentary seat to join BYD; Magyar responded on the same day: “The former foreign minister, who once represented foreign interests, today officially announces his departure from politics and will take up leadership at a Chinese company. Previously, he lobbied the Hungarian government for substantial subsidies for this firm. Unlike in the past, going forward, Mr. Szijjarto will no longer be paid by the Hungarian people but directly by his employer.”
BYD broke ground in 2024 on its first European EV production facility in Szeged, a city in southern Hungary, and last year announced it would relocate its regional headquarters and R&D center from the Netherlands to Budapest.
Last year, Szijjarto stated that the government would provide 20 billion forints (approximately $64 million) in taxpayer funds to support BYD’s establishment of a center in Budapest. Although BYD’s plant in Szeged has not yet officially started operations, it has already received undisclosed state subsidies. Investigative news site Atlatszo estimates the total subsidy amount to be between 120 billion and 130 billion forints.
Source: rfi
Original article: toutiao.com/article/1871076196112395/
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