With Hungary seeing a change of government for the first time in 16 years, attention is turning to what impact it will have on Korean battery companies operating there. The Hungarian government had supported the battery industry, but the new government, while in opposition, showed a negative view of the sector.
According to major foreign media including the New York Times (NYT) on the 15th, in the Hungarian general election held on the 12th (local time), the opposition Tisza defeated the ruling Fidesz in a landslide. Tisza secured 138 seats, more than two-thirds of the total 199. Fidesz, on the other hand, gave up 80 seats from its previous tally and managed to secure 55.
Hungarian Prime Minister Viktor Orban conceded defeat at his campaign headquarters, saying, "The responsibility and opportunity to govern Hungary has not been given to us now." Peter Magyar, who leads Tisza, stood before supporters and celebrated the victory, saying, "We have liberated Hungary and taken back our country."
The battery industry, which had been closely watching the Hungarian election results, was thrown into confusion. The Orban government, which was routed this time, unveiled the "National Battery Industry Strategy 2030" in Sept. 2022, setting a goal of becoming the center of Europe's battery supply chain by 2030. The Orban government offered subsidies and tax breaks to battery-related manufacturers investing locally.
Some Korean battery companies are operating battery plants in Hungary targeting the European market. Samsung SDI began producing batteries at its Hungarian plant in 2017. Samsung SDI has also been producing batteries at its second Hungarian plant since 2023. SK On has three plants in Hungary. Plant 1 has been operating since 2020, Plant 2 since 2022, and Plant 3 since 2024.
Many Korean battery materials companies have also expanded into Hungary. EcoPro completed Hungary's first cathode materials plant in Europe in Nov. last year. The plant will begin commercial operations in the second quarter of this year. Solus Advanced Materials built a copper foil plant in Hungary and has been mass-producing since 2021.
Korean battery corporations have focused on Hungary because it is one of Europe's electric vehicle manufacturing hubs. Three German automakers—Audi, BMW and Mercedes-Benz—are producing or plan to produce electric vehicles in Hungary.
China's CATL, the world's No. 1 battery maker, also released in 2022 that it would build a 100 gigawatt-hour (GWh) production plant in Debrecen, Hungary. The plant is scheduled for completion in 2027. BYD also held a joint press conference with Prime Minister Orban in May last year and announced plans to establish its European headquarters.
However, Tisza, which has taken power, has repeatedly made the battery industry a political issue, citing environmental concerns and other issues. During the general election, it also targeted environmental and labor issues related to the battery industry.
A battery industry official said, "Because it was a flagship project pushed by the Orban government, the battery business was a point of contention when Tisza was in the opposition," adding, "We are worried that tax benefits related to batteries may be reduced."
The official added, "Since Hungary's core industry is automobiles, we are hopeful they won't be able to block the battery industry outright."
Another battery industry official said, "The general election has just ended, so we are watching the situation," adding, "Since a party that had been negative about the battery industry while in opposition has taken power, we are closely monitoring Hungarian government policy."