Battery manufacturing-related investments in Hungary have risen to €24bn since 2016 and state promotion agency HIPA has supported 59 projects, creating 33,000 jobs, HIPA chief Istvan Joo said at the opening of the Hungarian Battery Week conference on November 6.

Asian companies have taken a dominant position in the industry. Of the 10 electric battery companies accounting for 95% of the market, six are Chinese, three are South Korean and one is Japanese, but none are European, he said. In his view, the European automotive sector needs to collaborate with Chinese companies or face a bleak future.

Hungary has embraced  two global megatrends, electrification, which is redefining the global economic landscape, and the rising share of Asian FDI.

The government's Eastern Opening policy had helped to make Hungary a "meeting point" between West and East, for big German carmakers and Asian new energy suppliers. He added that the government's strategy of connectivity, a demonstration of a policy of economic neutrality, had been a window of opportunity for cooperation between Eastern and Western companies.

BMW is currently building its first iFactory near Debrecen, and EVE Power is building its first European factory next door. The world’s leading battery producer CATL will supply the Hungarian unit of Mercedes in Kecskemet.

In 2023, lithium-ion batteries represented 6.4% of Hungary’s exports.

Joo assured investors that battery cell production facilities in Hungary are up and running or will be built, referring to recent closures of battery cell plants in Western Europe. Hungary is a safe haven and an alternative source for further growth, he added.

Hungary is also striving to create the entire ecosystem in battery production through the development of a comprehensive supplier network as well.

The production of major components is well underway, except for anode manufacturing, he added.

Hungary aims to go beyond production and become a strategic centre for battery technology.

The government encourages new partners to bring high value-added activities to the country and convince companies that already have a presence in the country to move towards R&D activities and university collaborations, he said.

The government set out five strategic goals for 2030: maintaining Hungary's rank among the top five global battery producers, establishing Hungary as Europe’s top R&D hub for battery technology, leading in European patents within the sector, creating a leading educational base for battery-related training, and becoming a key service hub for financial, legal, and HR functions in the battery industry.

The government is constantly fine-tuning its investment promotion system to attract projects that help the economy move up the global value chain.

Joo also touched on the recent decision of the European Commission to slap punitive tariffs on Chinese electric car companies, which in his view could lead to a damaging trade conflict, that would make the entire European automotive and battery industry suffer.