Szijjártó joins BYD after €120 million subsidy

Peter Szijjártó, Hungary's former foreign minister, quit parliament this week to join BYD, the Chinese electric-vehicle maker whose Hungarian expansion he spent years promoting from office. Opposition leader Péter Magyar called it one of the most outrageous forms of corruption (24.hu). The story drew immediate international coverage (LA Times). The revolving-door scandal and the subsidy question behind it are legally separate but economically linked, and the subsidy question reaches well beyond Hungary.

The public money behind the hire

Under Szijjártó's ministry, Budapest channelled roughly HUF 50 billion (about €120 million) in state support tied to BYD's Hungarian projects (24.hu). Hungary's pitch to carmakers goes further than cash: Mercedes has described Hungarian production costs as roughly 70% below German levels, with fast permits and ready infrastructure (Handelsblatt).

EU state-aid rules, set out in Article 107 TFEU, exist to stop governments from giving companies special advantages that tilt competition across the single market. Subsidies are allowed for regional development or green investment, but the public cost should match the public benefit. That a former minister who shaped those subsidies now works for the recipient does not prove the aid was illegal. It does give citizens reason to ask whether Hungary drove a hard enough bargain.

Why the subsidy race exists

EU tariffs make Chinese-made electric vehicles more expensive: BYD faces a 17% duty, other Chinese producers up to 35.3%. Yet Chinese models still sell for roughly 21% less than European rivals even with those tariffs (taz, CSIS). Build the same cars inside the EU, and much of the remaining tariff cost disappears. That is why, since the Commission opened its anti-subsidy investigation in September 2023, ten new production sites linked to Chinese manufacturers have been announced across Europe (taz).

Each country sets different conditions. Spain is trying to attract SAIC to Galicia while requiring at least 50% local or European components by 2030 (El Mundo). France ties consumer purchase bonuses to where and how a car is made, so BYD's future European-built vehicles could qualify for French subsidies (Auto Orange). Hungary offered money and low costs with few public conditions attached.

Who gains, who pays

Hungarian construction firms, logistics providers and local workers gain from factory activity. Consumers across Europe benefit from lower EV prices. But German and Polish suppliers face direct competitive pressure. According to Polish industry analysts, around 45,000 jobs in batteries, automotive parts and steel could be at risk, with possible indirect costs of €11.4 billion to the Polish economy (Money.pl).

The deeper problem is what these factories actually produce. A plant that assembles cars from imported Chinese batteries and electronics creates jobs but does not build European know-how in the most valuable parts of the EV supply chain. EU member states granted €168.23 billion in state aid across all sectors in 2024 (European Commission). Without enforceable conditions on local content and technology, some portion of that spending pays companies for access to a market they would have entered anyway.

Three legal questions now run side by side. State-aid rules ask whether Hungary gave BYD an unfair advantage. The Foreign Subsidies Regulation, which targets non-EU government support flowing into EU markets, asks whether Chinese state backing distorts BYD's position inside Europe (Euronews). Domestic ethics rules ask whether Szijjártó personally profited from decisions he made in office.

The evidence supports a conclusion broader than one man's career move. Europe still lacks a common test for when Chinese EV investment builds genuine industrial capacity and when it buys single-market access with taxpayer money. Spain's local-content targets and France's eco-score conditions are early attempts. Hungary shows what happens without one: a €120 million public bet whose returns remain unaudited, and a former minister who walked from the negotiating table to the company's payroll.