The Hungarian government led by Peter Magyar has alleged that the previous administration under Viktor Orban committed more than HUF70bn (€175mn) in state-funded infrastructure investment and an undisclosed direct subsidy worth billions of forints to Chinese electric vehicle maker BYD for its flagship manufacturing plant in Szeged, adding fresh political controversy to one of the country's largest-ever foreign investments, conservative weekly Magyar Hang writes.

A state secretary at the foreign ministry revealed documents that showed that the state had undertaken infrastructure developments exceeding HUF70bn around the site of the factory. The Orban government had also promised the company "enormous direct financial support", although the exact amount remains classified as a business secret.

Gyorgy Velkey said the subsidy was "of a similar magnitude" to the incentives granted to Chinese battery manufacturer CATL for its Debrecen gigafactory. Media reports at the time estimated CATL's state subsidy at around HUF130bn, suggesting the total level of state support for the BYD investment could be significantly higher than previously disclosed.

The audit comes less than two weeks after former foreign minister Peter Szijjarto announced he was quitting the Fidesz faction to take up a senior position at BYD, in charge of external relations and developing new business areas. Szijjarto's move sparked debate over conflicts of interest, given his central role in securing state support for the company.

The appointment has also drawn criticism from government officials and former diplomats, who cite ethical concerns and Szijjartó's previous oversight of intelligence services, although BYD says he will not be involved in its Hungarian operations. Details of the parliamentary national security committee's review of the appointment have reportedly been classified until 2051.

Magyar said Hungary should introduce cooling-off periods before former ministers can join companies they previously supported, while noting BYD has received around HUF300bn in state aid.

The new government is also reviewing investment agreements concluded by the Orban administration on a case-by-case basis. The former government made attracting Asian electric vehicle and battery manufacturers a cornerstone of Hungary's industrial policy.

Over the past decade, Hungary has become one of Europe's largest recipients of Chinese manufacturing investment, with companies including BYD, CATL, Eve Energy, Sunwoda and Semcorp announcing multibillion-euro projects.

According to Velkey, the Orban government also gave the green light to BYD to bring up to 10,000 foreign guest workers to Hungary, a figure close to the total number of jobs the company had pledged to create at the factory, according to documents presented by the state secretary.

The issue of foreign labour has become politically sensitive in Hungary. While the Orban government defended the use of guest workers as necessary to address labour shortages and support industrial expansion, Tisza campaigned on prioritising Hungarian workers and reducing reliance on imported labour.

The latest revelations also follow a series of controversies surrounding the construction of BYD's Szeged factory. According to Magyar Hang, police are conducting 29 separate investigations linked to the project, including cases involving workplace accidents and suspected criminal offences.

Construction has been marred by two fatal workplace accidents involving Chinese workers within a matter of months, prompting calls from occupational safety organisations for stricter supervision. Labour rights have also come under scrutiny after Magyar Hang, citing the New York-based NGO China Labour Watch, reported allegations that some Chinese guest workers worked 7 days a week in 9-12 hour shifts, exceeded legal overtime limits, and had part of their wages withheld. BYD has not publicly responded to those allegations.

Environmental regulators have meanwhile investigated the project after contaminated soil from the construction site was allegedly spread onto nearby farmland without mandatory testing, resulting in a HUF10mn fine. The newspaper has also reported disputes between BYD and Hungarian subcontractors over allegedly unpaid invoices.

BYD announced plans to build its first European plant in Szeged, close to the Serbian border, in late 2023, as part of an investment estimated at €5bn. The company is due to start production at Szeged in Q4 2026, a year later than originally scheduled.

Trial production at the facility began in January 2026, and installation of manufacturing equipment is currently underway. The plant is BYD's first passenger-car manufacturing facility in Europe and is a key part of the Chinese automaker's strategy to localise production within the EU. Hungary was chosen as the production site to reduce the impact of EU tariffs on Chinese-made electric vehicles.