Hungary to Crack Down on Environmental Violations by EV Battery Makers, Risking Plant Closures

Hungarian Minister of Environment László Gajdos announced that the government will impose strict measures—including factory closures—on traction battery manufacturers violating environmental regulations. This move marks a significant shift in Hungary’s battery industry policy, standing in stark contrast to former Prime Minister Viktor Orbán’s previous strategy of aggressively attracting foreign investment to develop the sector. Since 2021, Hungary has drawn approximately €26 billion in foreign investment—primarily from South Korean and Chinese companies—through preferential policies, positioning itself as a key European hub for traction battery manufacturing. However, recent concerns over environmental pollution, health risks, and safety issues linked to battery plants have sparked public outcry and emerged as a central topic in this year’s general election. Ultimately, center-right candidate Péter Magyar, who advocated for stricter industry oversight, won the election. On July 1, Gajdos stated that industrial development had been overly prioritized over the past 16 years and that restoring balance between industry and environmental protection is now essential. He emphasized that companies repeatedly violating laws, endangering public health and safety, and disregarding legal obligations should not be allowed to remain in Hungary. He also pledged to raise environmental fines to the “strictest level in Europe.” Major battery manufacturers currently operating in Hungary include China’s Contemporary Amperex Technology Co. Limited (CATL), whose €7.3 billion, 100 GWh battery plant in Debrecen is nearing production; South Korea’s Samsung SDI, which is expanding its facility in Göd; and BYD, which is constructing its first European vehicle plant in Szeged, aiming to begin mass production in Q4 2026 alongside localized battery production capacity.