BYD’s Sprint to Secure European Manufacturing Hits a Reputational Roadblock

BYD accelerates European production through new plants and potential acquisitions to bypass tariffs, but faces labor abuse allegations at its Hungarian site that threaten its expansion.

The world’s largest electric-vehicle maker is racing to lock down production capacity in Europe on two fronts: by building its own plant in Hungary and by negotiating to buy existing factories from struggling rivals. But even as BYD notched a record 135,000 vehicles exported in April — a 70% surge from a year earlier — the company’s high-stakes push into the region faces a growing reputational challenge over alleged labour abuses at its Hungarian construction site.

Executive Vice President Stella Li confirmed at the FT “Future of the Car” conference in London that BYD is in talks with Stellantis and other European manufacturers about taking over underused facilities. The Cassino and Mirafiori plants in Italy, both operating at a fraction of capacity, are seen as prime targets. Cassino produced just 2,916 vehicles in the first quarter of 2026, a 37% drop year-on-year. Li made clear that BYD wants to run any acquired sites independently, not as joint ventures. “It is very hard to cooperate with someone and have to ask for permission. We prefer to do everything ourselves,” she said.

The logic is straightforward: producing inside the European Union sidesteps provisional import tariffs of 17% to 35% that Brussels imposed on Chinese-made EVs in 2024. BYD is already building a $4.5-billion factory in Szeged, Hungary, where test production is due to start in the first quarter of 2026 and mass manufacturing by the second quarter. A second site in Manisa, Turkey is slated to come online by 2027. Snapping up existing plants would accelerate the timeline by years, and the company is also eyeing distressed European car brands.

Yet the Szeged project, meant to be BYD’s gateway to the European mass market, has become a flashpoint. A mid-April report by the watchdog China Labor Watch accused subcontractors on the site of systematically imposing shifts exceeding twelve hours, seven days a week, alongside opaque recruitment practices that put Chinese migrant workers at a disadvantage. The allegations land particularly heavily because the contractor is a subsidiary of Jinjiang Construction Group — the same conglomerate linked to a 2024 scandal involving slavery-like conditions at a BYD plant in Brazil. The carmaker ended that South American relationship but has since hired another Jinjiang affiliate for the Hungarian site. A BYD spokesman insisted the company strictly complies with local laws.

The export numbers that buoy the expansion strategy are impressive by any measure. April’s 135,000 overseas sales marked a new monthly record and a 70% leap from April 2025. In the first four months of 2026 alone, BYD shipped roughly 456,000 vehicles abroad, and international sales now account for nearly 43% of total monthly volume. In Germany, April saw 4,705 new registrations — more than triple the year-earlier figure and a national record for BYD. In the UK, the brand has overtaken Tesla and every major European manufacturer to become the best-selling EV by registrations. The company is sticking to its full-year target of 1.5 million exports, a 50% increase over 2025.

Wall Street, for its part, has not flinched. JPMorgan maintains an “Overweight” rating on BYD’s Hong Kong-listed shares with a price target of 120 HKD, citing an unexpectedly strong domestic sales outlook. BYD plans to sell up to four million vehicles in China this year, representing growth of as much as 14% — well above flat market expectations. By the fourth quarter of 2026, the company expects models priced at more than 200,000 yuan to account for over 30% of sales, while new fast-charging technology improves margins at home.

The stock itself tells a more cautious story. H-shares (1211.HK) closed at 98.15 HKD, well below the year’s peak of 159.27 HKD and down more than 10% over the past month. The primary article noted the shares slipped under the 100-day moving average, with the next technical support level at 96.83 HKD. Citigroup still holds the stock as a top pick with a 142-HKD target, expecting second-quarter core net profit of up to 11.3 billion RMB — provided export volumes hold steady and domestic prices firm up. The average of 25 analyst price targets remains at 124 HKD, unchanged even after forecasts for 2026 revenue and profit were trimmed.

In the near term, the direction may depend on concrete news from Hungary — not only about production ramp-up but about how BYD handles the labour allegations spreading through the European Parliament. If the company can keep the factory timeline on track while managing the reputational fallout, it will have cleared a major hurdle in its campaign to become a truly European manufacturer. If not, the road ahead could get bumpier.