By Jiahui Huang

Chinese electric-vehicle giant BYD is set to establish its European headquarters in Hungary, which will help the company expand aggressively overseas and localize production in the region.

The facility, which will be used for sales, after-sales services, testing, localizing designs and developing functions, will create thousands of jobs, the company said in a statement Friday.

In terms of research and development, the European headquarters will focus on advanced driving-assistance technology and the next generation of vehicle-electrification technology, the company said.

The move comes as BYD and other Chinese automakers have been expanding their businesses overseas to boost their bottom lines as competition intensifies in the domestic market.

A continuing price war in China has pressured BYD's margins recently. Increasingly, sales contributions from overseas markets are supporting its margins. BYD's export volume more than doubled in the first quarter, contributing 21% to total vehicle sales compared with 16% last year, Morningstar analyst Vincent Sun wrote in a recent note.

The facility, coupled with an existing factory in Hungary, could also help BYD localize its production in Europe. The EU imposed higher tariffs on China-made EVs last year when trade relations were tense, setting a rate of 17.0% for BYD, 18.8% for Geely and 35.3% for SAIC.

China's Ministry of Commerce said last month that China and the European Union have agreed to restart negotiations on EV tariffs.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

May 16, 2025 04:19 ET (08:19 GMT)

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