Hungary’s Transformation Unpacked (Part II): The 'China Ledger' After Rejoining Europe’s Mainstream

In April 2026, Viktor Orbán stepped down, and the Tisza Party, led by Máté Kocsis, assumed control of Hungary’s political landscape. Many people’s first reaction was to look toward Brussels: Would the EU’s frozen funds be unfrozen? Would Hungary swiftly rejoin Europe’s mainstream? But if we push our gaze one layer deeper, what truly warrants attention from businesses and capital is another ledger—the 'China ledger.' On May 15, 2025, Hungarian Prime Minister Viktor Orbán and Wang Chuanfu, Chairman and CEO of BYD, held a press conference in Budapest, Hungary. For over a decade, Hungary has served as a critical landing point for Chinese capital entering Europe’s manufacturing heartland—not merely due to its geographical location, but more importantly thanks to the unique environment cultivated during Orbán’s era: proactive policy welcome, regulatory flexibility, and explicit political endorsement. Today, Kocsis must simultaneously advance reforms to secure the release of approximately €17 billion in frozen EU funds—of which around €10 billion in Recovery and Resilience Facility grants face a deadline of August 31 to meet disbursement conditions—while also navigating the reality that Chinese-invested projects are now deeply embedded within Hungary’s industrial system. So just how weighty is this ledger? According to the 2024 updated report by MERICS and Rhodium Group, Hungary absorbed roughly €3.1 billion in Chinese investment in 2024—accounting for 31% of China’s total investment flows into Europe that year. This is no ordinary share—it is an exceptionally concentrated one: for every roughly three euros of Chinese investment flowing into Europe, one euro lands in Hungary. In other words, Orbán-era Hungary was not merely a generic foreign-investment recipient; it functioned as a high-density springboard for Chinese capital to enter Europe’s new-energy and automotive value chains. This status is most vividly embodied in two strategic lines: A BYD automobile awaiting boarding on the 'Shenzhen'—the latest vessel in the company’s container fleet. The first line is batteries. In 2022, CATL officially announced its €7.34 billion investment to build a 100 GWh battery factory in Debrecen, Hungary—the company’s second battery plant in Europe and one of the most symbolically significant Chinese-invested battery projects on the continent. The site of BYD’s future passenger vehicle plant in Szeged, Hungary, prior to construction (December 2023) The facility is already taking shape and officially commenced operations in January 2026. The second line is complete vehicles and regional headquarters. In 2023, BYD announced plans to construct its first European passenger vehicle plant in Szeged, Hungary—officially stating the project would generate thousands of local jobs. By 2025, BYD further announced it would locate its European headquarters and R&D center in Budapest, embedding sales, testing, and R&D functions locally in Hungary. CATL’s battery cell factory near Mikárd village, Hungary. In short, Hungary is no longer simply hosting isolated factories—it is hosting an integrated chain spanning 'batteries–vehicles–regional headquarters–R&D.' European rules are no longer what they used to be. And herein lies the crux of the issue. During Orbán’s tenure, the core logic underpinning this model was straightforward: adopt a more proactive national stance to attract Chinese capital, then leverage the EU’s single market to scale up these projects. But today’s Europe is no longer the same Europe of just a few years ago—one that asked only, 'Is there investment?'

CATL: The Hidden Half Beneath the Iceberg

The EU’s new Battery Regulation mandates full lifecycle carbon footprint tracing and digital battery passports. CATL not only pioneered certification compliance but also partnered with BMW on a cross-border pilot for 'battery passports,' establishing digital records covering the entire battery lifecycle—and setting a 2035 target for carbon neutrality across its value chain. On another dimension of the profit-and-loss statement, energy storage batteries account for nearly 30% of profits, with gross margins significantly higher than those of automotive动力电池. Energy storage business growth substantially outpaces that of automotive batteries, serving as the primary driver of revenue growth in the first half of the year. In the first half, revenue from energy storage battery systems reached RMB 53.261 billion—a sharp year-on-year increase of 87.54%. Energy storage represents the 'second growth engine,' yet this is far from the final chapter. In the AI data center sector, CATL has built a 'computing-electricity synergy' platform through investments in companies such as Zhongheng Electric and CenturyLink, delivering comprehensive, scenario-specific energy solutions. Its battery-swap network is rapidly expanding: approximately 2,000 'Chocolate' swap stations have been deployed nationwide, with extensions underway into heavy-duty truck applications and overseas markets—or alternatively, CATL provides technology licensing and operational services directly. Once a battery industry leader establishes its technological high ground—from selling batteries to selling energy management solutions, and evolving from a battery manufacturer into a new-energy infrastructure platform—its integrated value becomes incomparable. From a horizontal perspective, CATL collaborates with next-generation supply-chain enterprises such as Huawei and Horizon Robotics, weaving together an industry-wide web of core technologies. It is precisely this ecosystem that enables German and Japanese automakers to recognize the value of China’s industrial chain: even amid sales pressure, they remain committed to the Chinese market—not only manufacturing in China, but increasingly conducting R&D in China, and developing products in China for global markets. CATL’s cooperation with automakers extends well beyond simple buyer-seller relationships. Joint development begins as early as the cell design stage, enabling deep integration with vehicle performance. The Xiaomi SU7 Ultra serves as a prime example. At the Nürburgring, it set a lap record of 6 minutes, 46.874 seconds—powered by ultra-electronic-path technology co-developed by CATL and Xiaomi. This innovation shortens key electronic transmission paths within the cell by 20% and increases transmission cross-sectional area by 30%, thereby boosting output power while reducing internal resistance. Once such a technological foundation is established, benefits extend far beyond track performance—they enable broader technological democratization. The Geely Galaxy TT series comes standard with CATL’s Shenxing dedicated battery, supporting 6C ultra-fast charging: replenishing 400 km of range in just 11 minutes, bringing both 800V high-voltage platforms and 6C ultra-fast charging into the RMB 150,000 price segment. In summary, China’s leading-edge technology brands have truly taken root. All Chinese brands benefit, collectively elevating the entire domestic brand ecosystem—and empowering Chinese brands’ global expansion. The German factory mentioned above—the first in Europe—is already profitable. The second European factory, located in Debrecen, Hungary, officially commenced operations on September 22. As China’s largest overseas battery manufacturing base, it not only better serves European automakers but also supports Chinese brands’ expansion into the European market. Conclusion CATL possesses undeniable advantages in technology, scale, and cost. Its energy storage and overseas businesses continue to grow rapidly. Yet CATL never engages in price wars—nor does it squeeze out secondary-tier battery makers’ profits solely to gain greater market share. From a certain perspective, the battery industry’s profitability stems precisely from the strategic discipline of its leaders. Indeed, over the past decade, the price of power batteries has dropped by more than half—not due to cutthroat, low-cost competition, but rather through tangible technological progress and economies of scale.

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