By Adria Calatayud

China's BYD plans to build an electric-vehicle plant in Hungary, setting up its first car factory in Europe as Tesla's rival seeks to expand beyond its home market.

The company--backed by Warren Buffett's Berkshire Hathaway--said on a social-media post on Friday that it hopes the move will accelerate the pace of its entry into the European EV market and broaden its global footprint.

The company didn't detail the size of its investment in Hungary or when production will start, but said the plant will be constructed in phases and is expected to create thousands of local jobs.

Hungarian Foreign Minister Peter Szijjarto said BYD's plant, to be located in the southern city of Szeged, will be one of the biggest investments in the country's history. The Hungarian government plans to provide financial aid, but the size of its support will be disclosed only after approval by European Union authorities, he said.

BYD, China's largest EV maker, is closing in on Tesla's position as the world's No. 1 seller of EVs and has set its sights on expanding globally after surpassing Volkswagen as the top car brand by sales in its home market.

The company is building an EV plant in Thailand and The Wall Street Journal reported earlier this year that it held talks to buy a Ford Motor manufacturing plant in Germany. In October, Ford said an unnamed investor pulled out.

The rise of BYD and some of its Chinese peers has raised concerns in developed countries. The Biden Administration is discussing raising tariffs on Chinese EVs, The Wall Street Journal reported this week. In September, the European Union launched an antisubsidy investigation into Chinese EV makers.

BYD doesn't feature in the list of bestselling car companies in the EU that the European Automobile Manufacturers' Association, or ACEA, publishes every month. However, the company has been taking market share in some countries such as Sweden, data from the Mobility Sweden automotive association shows.

Tesla held 3.5% share of the EU car market in November, according to ACEA.

With its plant in Szeged, BYD will become the latest Chinese company to bet on Hungary, which has been courting Chinese investments for years. EV battery maker Contemporary Amperex Technology--known as CATL--last year said it would invest 7.34 billion euros ($8.08 billion) to build a plant there and the country hosts a Huawei Technologies supply center.

Mercedes-Benz, BMW and Audi, among other carmakers, also have factories in Hungary.

Sherry Qin contributed to this article.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

December 22, 2023 08:26 ET (13:26 GMT)