BM W raises investm ent in Hungary EV factory

BERLIN: BMW raised its planned investment in an electric vehicle (EV) factory under construction in Hungary to over two billion euros ($2.08 billion) on Friday and said it will build a 500-million-euro high-voltage batery assembly plant on site.

The carmaker had previously said it would spend over one billion euros on the Debrecen factory, due to open in 2025 and ramp up to producing 150,000 cars a year.

Hungary’s government will provide 13.5 billion forints ($33.92 million) of non-refundable subsidy for the additional investment, Foreign Minister Peter Szijjarto said at a press conference.

“The close link between batery assembly and vehicle production is part of our strategy,” said Markus Fallboehmer, senior vice president of batery production at BMW.

BMW assembles bateries at three sites in Germany, as well as its U.S. Spartanburg site and its Shenyang plant in China, and will source batery cells in Europe from Chinese batery producers CATL and EVE.

Five hundred additional jobs will be created to staff the batery assembly plant.

Orban’s government is pinning hopes on electric vehicle and batery investments to steer Hungary, highly exposed to the internal combustion car sector, through to the next phase of the industry, which accounts for about 5 to 6% of its GDP and employs over 150,000 people.

German automakers have long been a key contributor to Hungary’s economy, with Mercedes-benz and Audi also present in the country alongside numerous major suppliers including Continental, Schaeffler and ZF.