Szijjártó’s BYD Move Tests EU Subsidies

Peter Szijjártó, Hungary's former foreign minister, left parliament this week to join BYD, the Chinese electric-vehicle maker whose Hungarian expansion he had spent years selling from office. Opposition leader Péter Magyar called it one of the most outrageous forms of corruption (24.hu). The case was quickly picked up internationally (LA Times). The job move and the subsidy behind it are separate legal questions, but economically they sit in the same file. For a small EU state like Malta, where public incentives and private access often meet in a very tight political space, the issue is familiar: who carried the risk, and who collected the benefit?

The public money behind the hire

Under Szijjártó's ministry, Budapest channelled roughly HUF 50 billion — about €120 million — in state support linked to BYD's Hungarian projects (24.hu). Hungary's offer to carmakers was not just cash. Mercedes has described Hungarian production costs as roughly 70% below German levels, with fast permits and infrastructure already in place (Handelsblatt).

EU state-aid rules, in Article 107 TFEU, are meant to stop governments from using public money to give favoured companies an advantage inside the single market. Aid can be allowed for regional development or green investment, but the public cost is supposed to be justified by a public return. The fact that a former minister who helped shape those subsidies now works for the company receiving them does not, on its own, prove illegality. It does make the bargain look weaker from the taxpayer's side.

Why the subsidy race exists

EU tariffs have made Chinese-made electric vehicles more expensive: BYD faces a 17% duty, while other Chinese producers face up to 35.3%. Even so, Chinese models still sell for roughly 21% less than European competitors after tariffs (taz, CSIS). Build the same cars inside the EU, and much of the tariff problem disappears. 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).

Member states are not offering the same deal. Spain is trying to bring SAIC to Galicia, but wants at least 50% local or European components by 2030 (El Mundo). France links consumer purchase bonuses to where and how a car is made, which means BYD's future European-built vehicles could qualify for French subsidies (Auto Orange). Hungary offered money, low costs and, from what is publicly known, fewer hard conditions.

Who gains, who pays

Hungarian construction companies, logistics operators and local workers gain from factory activity. European consumers gain from cheaper electric cars. The pressure falls on German and Polish suppliers. Polish industry analysts estimate that 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 harder question is what these factories leave behind. A plant that assembles cars from imported Chinese batteries and electronics creates jobs, but it does not necessarily build European capacity in the most valuable parts of the electric-vehicle 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 transfer, part of that money may be paying companies to enter a market they intended to enter anyway.

Three legal tracks now run together. State-aid rules ask whether Hungary gave BYD an unfair advantage. The Foreign Subsidies Regulation, which deals with 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 benefited from decisions he made while in office.

The evidence points beyond one politician's career move. Europe still has no common test for when Chinese EV investment builds real industrial capacity and when it simply buys access to the single market with public money. Spain's local-content targets and France's eco-score conditions are early attempts to draw that line. Hungary shows the cost of not drawing it clearly: a €120 million public bet whose returns remain unaudited, and a former minister moving from the negotiating table to the company's payroll.