Hungary probes BYD subsidies from Orbán era

Hungary's prime minister, Péter Magyar, has ordered a formal investigation into the state subsidies, tax breaks and permits granted to Chinese electric vehicle maker BYD, marking a direct challenge to investment deals brokered under the previous government of Viktor Orbán.

The probe centres on Péter Szijjártó, Orbán's foreign minister and a close ally, who resigned from parliament last Wednesday to take an executive position at the world's top electric carmaker. Szijjártó had personally negotiated BYD's entry into Hungary and facilitated substantial government support for the project while still in office.

Magyar told lawmakers on Monday that Szijjártó had assisted BYD "with hundreds of billions (of forints) in public money, diplomatic support and state infrastructure." The investigation will examine all subsidies, tax breaks, permits, environmental exemptions and publicly funded investments granted to the company.

The inquiry will not stop at BYD. Magyar said it would extend to all subsidies and state commitments made to large multinational firms during Orbán's tenure, signalling a sweeping reassessment of Hungary's industrial policy.

The move is part of a broader effort by Magyar to dismantle Orbán's political infrastructure since his landslide election victory in April. Last week, parliament — where Magyar's Tisza party holds a two-thirds majority — voted through a constitutional amendment ending the term of Tamás Sulyok, the Orbán-appointed president. Magyar has now proposed Judit Polgár, widely considered the greatest female chess player of all time, for the role.

For European business and investors, the investigation raises questions about the stability of investment frameworks in Hungary. BYD's Hungarian plant is part of a wider push by Chinese automakers to establish manufacturing bases inside the EU. If the terms of those investments are now subject to retrospective scrutiny, other manufacturers considering European production may need to factor political risk into their calculations more heavily.

Szijjártó's swift transition from minister to BYD executive also highlights the revolving-door dynamics that European regulators have increasingly scrutinised. The conflict-of-interest accusations carry weight because of the scale of state support Magyar described.

The investigation is in its earliest phase, and no findings have been announced. But Magyar's decision to launch it publicly signals that the BYD deal will serve as a test case for how his government handles the legacy of Orbán-era industrial policy.