One of the world's leading lithium-ion battery producers, Sunwoda, will build its first European plant in Nyiregyhaza, northern Hungary, Minister of Foreign Affairs and Trade Peter Szijjarto announced on July 27.

The HUF580bn (€1.53bn) project is the largest investment in Hungary in 2023 and the third which exceeds the €1bn value. In the initial phase, the company will invest HUF93bn, which will create "several thousand" jobs.

Szijjarto noted that competition to host the investment "was extremely fierce" and pitted Hungary against a number of other countries known for their automotive industries.

Sunwoda has seven manufacturing facilities in China and India. It posted RMB52.1bn (€6.6bn) in revenue, up 40% from 2021, and net profit rose 16% to RMB1bn.

After the Chinese company’s entrance in Hungary, five out of the world's top ten electric battery manufacturers with a combined 49.4% share of the global market, will be present in Hungary, according to Szijjarto.

Hungary ranks fourth globally in electric vehicle battery production, and with the completion of new investments in the pipeline, the country will move up to second place, he said earlier.

Electric vehicle batteries have become Hungary's number one export product over the past 1-1.5 years, as the government has gone to great lengths to attract Asian manufacturers to the country. Szijjarto argued earlier that German carmakers were lobbying for Chinese suppliers to come to Hungary.

Chinese CATL, the world's leading battery maker, is building a 100 GWh plant in the eastern Hungary city of Debrecen from a €7.34bn investment, one of the largest greenfield investments in Europe. The government offered €800mn in grants, tax breaks, and infrastructural support for the project.

Szijjarto attempted to alleviate worries regarding the environmental consequences of the investment. The factory's water needs will be supplied from purified wastewater and electricity needs will be covered by solar energy.

The country’s eastern region is becoming a hub for EV battery manufacturing. Sector peer, South Korea’s W-Scope broke ground on a €720mn battery separator plant in October in the same industrial park where Sunwoda is building its new factory.

The government expects that new production sites located in the eastern region with jobless rates above the national average could suck up the local labour force. Analysts warned that even with low-skilled jobs offered, companies will have trouble filling the posts without foreign workers. Parliament relaxed the labour rule for third-country citizens in the spring.

Prime Minister Viktor Orban acknowledged in a recent speech that Hungary will need 500,000 new workers in the next couple of years to meet the needs of new factories. By the end of 2030, Hungary's active labour force will shrink by 300,000 due to failing demographics.

Hungary’s nationalist leader is now talking about the need for importing workers from abroad, which is in sharp contrast with the xenophobic anti-migrant policy pursued by his government over the past few years.

The arrival of foreign workers has sparked conflicts in the small spa town of Hajduszobszlo, 20km southwest of Debrecen, a Fidesz stronghold. Locals are angry because many foreign guest workers are coming to the town to find rental properties.

The town’s mayor fears for the city's tourism. Responding to growing criticism of locals, in a Facebook post, which has since been deleted, he asked citizens to "report any cases where they see or suspect guest workers staying".

"I will disclose the names of individuals who are hosting guest workers," he wrote