TLDRs;
- BYD stock rose as the company confirmed plans to expand battery production in Europe alongside its growing car assembly network.
- New factories in Hungary and Turkey are expected to reach a combined annual capacity of 500,000 vehicles by 2026.
- BYD is still deciding whether its next move will be another assembly plant or a dedicated battery hub.
- Buffett’s Berkshire Hathaway exit was described as routine profit-taking, not a sign of doubt in BYD’s prospects.
BYD shares ticked higher in Hong Kong trading on Wednesday as investors reacted positively to the company’s European expansion strategy.
The world’s leading electric vehicle (EV) and plug-in hybrid manufacturer confirmed that it will need to manufacture auto batteries in Europe to support rising vehicle production across the continent.
Special adviser Alfredo Altavilla emphasized that building only assembly plants without local battery output would not be sustainable. “It does not make sense to invest in car assembly in Europe but bring batteries from China,” he told an automotive conference in Milan.
This announcement comes at a time when BYD is ramping up its presence in Europe with two major factories under development and strong ambitions to produce vehicles locally for European customers.
New Facilities in Hungary and Turkey
BYD’s European footprint is already growing. The company plans to bring its Hungarian factory online by the end of 2025, while a second facility in Turkey is scheduled to start operations in 2026. Combined, the plants are expected to reach an annual capacity of around 500,000 vehicles.
These new investments are critical to BYD’s strategy of producing all EVs for sale in Europe within the region, a move designed to avoid European Union tariffs on imported vehicles.
Executive Vice President Stella Li has previously stated that plug-in hybrids will likely dominate the company’s European sales in the near term, even as fully electric vehicles remain central to its long-term vision.
Considering Third Plant or Battery Hub
Beyond its existing projects, BYD is weighing whether its next step should be another assembly plant or a dedicated battery facility. Both options remain on the table as the company studies market demand, cost structures, and regulatory conditions.
Energy costs are a key factor in determining future investments, Altavilla noted. Battery production and vehicle assembly are energy-intensive industries, and competitive electricity pricing could heavily influence the final decision. BYD is currently in discussions with various European governments, exploring favorable conditions for expansion.
By localizing battery production, BYD not only strengthens its supply chain resilience but also aligns with Europe’s push for greener, domestically sourced energy solutions.
Buffett Exit Sparks Discussion
The company’s European expansion comes against the backdrop of Warren Buffett’s Berkshire Hathaway fully exiting its stake in BYD after a 17-year investment. While some speculated that the move indicated waning confidence in the automaker, Altavilla dismissed such concerns.
“Buffett made a profit of 20 times the capital he invested. He did very well to do what he did,” he said, adding that the exit was consistent with Berkshire’s strategy of buying, earning, and eventually selling.
Despite the departure of one of its most famous backers, BYD continues to chart an ambitious growth trajectory. Its latest share price movement suggests investors remain confident in the company’s future, particularly its European-focused expansion.
