In less than a decade, Hungary has become a front-runner in the battery industry, and in battery manufacturing specifically, and is already a strategic hub in Europe for the major players in the industry, Rita Szép-Tüske, deputy CEO of the Hungarian Investment Promotion Agency, declared in her keynote speech.

“Five of the world’s largest 10 battery manufacturers have chosen Hungary as their European production base; Samsung SDI, SK On, CATL, Eve Power, and Sunwoda are investing here, and these are only the cell manufacturers. […] More than 60 projects by over 40 companies have reached a positive investment decision, representing EUR 26.5 billion of foreign direct investment,” she said, adding that these projects, when finalized, are expected to create more than 35,000 new jobs.

By consistently following a path of what Szép-Tüske termed “economic neutrality and an investor-friendly approach,” Hungary has been able to attract both Western automakers in the middle of the transition to e-mobility, plus “the crème de la crème of the Asian battery manufacturers,” she said.

“With that, we have been able to create one of the most integrated supply chains in Europe, and a close look at the actual numbers and projections brings us to the conclusion that, by 2030, a substantial part of Europe’s battery-cell manufacturing will happen in Hungary, alongside, obviously, Germany and Poland. Globally, our contribution will amount to around 7% of the total capacity,” she predicted.

As Deputy State Secretary Ádám Nagy of the Ministry for National Economy said in his presentation, “This is unique in Europe, I think […]. What we have built during the past five to six years is a completely new battery ecosystem, of course, strongly connected to the automotive sector.”

Naturally, this rapid expansion in Hungary is in response to global and, especially, European developments in the EV markets, as Péter Kaderják, executive director of the Hungarian Battery Association (Huba), outlined in his welcoming remarks.

Key Threshold

“Last year, global electric car sales rose by 25% to 17 million, and annual battery demand surpassed 1 TW h, a historic milestone. At the same time, the average price of battery packs for battery electric cars dropped below USD 100 per kWh, commonly said to be a key threshold for competing on cost with conventional models,” he said.

Moreover, global demand for batteries has continued into 2025 “due to a massive increase in demand for EVs and energy storage activities […]. In the first half of the year, European EV sales grew by 25%,” Kaderják noted.

Yet despite the increased EV sales, the battery industry has been going through lean times of late, with many European producers delaying or even cancelling projects altogether, as the Huba chief admitted, saying that in 2024-25, Europe had lost more than 1.1 GW h of planned battery-cell production projects.

He highlighted, among other issues, regulatory fee complexity and delays in implementing battery regulations, at both the EU and member-state levels, along with high energy costs and limited government subsidies compared to competitor nations, all of which are hampering developments within the EU.

To back up his concerns, he cited “A Battery Deal for Europe,” a recently published paper by the Batteries European Partnership Association and Recharge.

“Without urgent and coordinated action, Europe risks falling into strategic dependency at the very moment batteries are becoming mission-critical infrastructure. These technologies are no longer confined to electric vehicles; they now underpin energy grids, construction equipment, maritime transport and defense systems. […] Losing ground in battery production would not only compromise Europe’s industrial base but also economic and geopolitical security,” the report says.

In essence, the paper calls for urgent action to hammer out a European strategy to coordinate the many disparate activities across EU member states and create an effective, competitive European battery sector.

Development Headwinds

In view of these concerns, Hungarian industrial planners may be congratulating themselves on what they have achieved, but Hungary has also been encountering development headwinds of late.

According to Kaderják, “pressing problems” in the sector include a scarcity of both R&D and battery testing facilities, and minimal battery recycling capabilities. On top of these issues, environmental concerns have arisen in Hungary, which he said, “Essentially means a temporary deadlock for new»battery sector investments.”

Yet, regardless of difficulties, Hungary is moving ahead to build on existing foundations in the sector.

As Szép-Tüske put it: “Looking ahead, Hipa’s vision for 2030 is quite clear; we aim to move up the value chain and position Hungary not only as a manufacturing hub, but also as a center of innovation and services. Therefore, we need to attract more projects with higher added value, including R&D.”

Some progress in this respect has already been achieved: Samsung SDI, in cooperation with Óbuda University and the Budapest University of Technology and Economics, has invested EUR 56 million into a research and development center at their base in Göd, one of the Korean company’s five R&D centers, Szép-Tüske said.

And as Nagy stressed several times in his presentation: “There is a very high level of expectation and also anticipation towards this sector […]. We have to follow this pathway that we have started. There is no stepping back.”

“So, today, in the market, there are 20 million cars equipped with CATL batteries. Our market share globally is roughly 38%, and more than 200 OEMs are our customers. Also, internal numbers for R&D. So, we [have invested] more than USD 10 billion since 2019, I think. We have more than 21,000 engineers working on development. We have globally more than 50,000 patents and patent applications. So, this is why we can bring the new technologies to this industry.”

Matt (Feng) Shen, managing director, CATL Germany and Hungary.

“The EU requirement mandates that, by 2027, at least 63% of end-of-life batteries must be collected. This ensures that recycling meets both environmental and industrial policy goals. This is economically and strategically valuable. Up to 50% of collected battery waste can be converted into black mass, a key intermediary which holds significant market value. Recycling reduces waste, supports raw material independence and makes economic sense for the entire value chain. From the sovereign-economic perspective, recycling helps create a sustainable supply of critical materials. By 2030, as much as 10-20% of cathode active material could come from recycling resources.”

Anita Simon, deputy chief executive of Hungarian specialist energy company Alteo.

“There is a shifting geopolitical climate as well that is currently questioning the electrification trend. Electrification is really here to stay, […] and either we can be a part of it, or we can choose not to be a part of it. [The question is] who will make our batteries in the end if we are not part of the game?”

Ilka Von Dalwigk, director general of Recharge, the advanced rechargeable and lithium batteries association in Europe.

This article was first published in the Budapest Business Journal print issue of November 14, 2025.