Or related to EU groundwater regulations, the European Commission has been exposed to investigate the Ningde Times Hungarian battery factory

Chinese battery companies have encountered difficulties in localizing their production capacity in the European and American markets.

On August 26th local time, Javor Benedek, a political figure from the Hungarian opposition dialogue party and former European Parliament member, stated on social media that the European Commission will investigate the battery factory of CATL in Debrecen, Hungary.

This spring, the opposition politician submitted a complaint to the European Commission, stating that the Ningde Times battery factory still obtained construction permits despite water usage requirements that may not meet EU directives on groundwater conditions.

Yavor wrote that the planned water demand of the battery plant will put pressure on the water sources in the Debrecen area, and the current water sources in Debrecen are severely overused, with water intake even exceeding three times the supply. Therefore, the successful approval of the Ningde Times factory indicates that the water source situation in the area will further deteriorate.

He said, "This will seriously damage ecosystems that have dried up, are connected to groundwater, and are protected by the Natura 2000 plan, such as the Debrecen Forest Nature Reserve."

In Javier's view, this means that the permit violates the EU Water Framework Directive and the EU Habitat Directive, and if the factory is built, EU funds will also be lost as a result.

Yavor also pointed out that the Hungarian opposition party believes that environmental departments in Hungary are on the brink of being unable to function due to political influence, and therefore an objective and independent institution is needed to investigate the actual impact of the Ningde Era battery factory on the water supply situation in Debrecen.

According to reports, the European Commission has now replied to Yavor stating that it will investigate the situation in its complaint.

Last August, CATL announced that it would invest no more than 7.34 billion euros to build a 100GWh battery factory in Debrecen, Hungary. After completion, it will become the largest battery factory in Europe, and it will be CATL's second overseas factory after its German factory.

The factory will produce battery cells and modules and become a service center for European automotive factories, supplying approximately 30 electric vehicle brands including BMW, Mercedes Benz, and Volkswagen. According to the established plan, the factory will be put into trial operation next year and put into operation in 2025.

Recently, Ningde Times responded to investor inquiries by stating that the Hungarian project is of a large scale and the company is carrying out construction in stages, which is progressing smoothly. At present, most of the products sold to Europe are domestically produced, with exports being the main focus in the short term. It is expected that the local supply will increase in the future when European factories are built and put into operation.

However, it is worth noting that the battery factory in Hungary that has been criticized for environmental issues is not only CATL, but also another South Korean battery recycling company, whose battery factory in Hungary, has recently been required to suspend indefinitely.

On August 22nd, the office of the Nograd County Government in Hungary announced an indefinite suspension of the business activities of the Korean battery recycling company SungEel Hitech Hungary Kft. located at the B á tonyterenye battery factory in Hungary. Previously, this factory had repeatedly violated relevant regulations on business operations and waste disposal.

According to Hungarian media reports, the Nograd County Government Office has previously imposed fines on the company six times, totaling nearly 100 million forints. Among them, a fine of 31 million forints was imposed in June and 50 million forints was imposed in July. The company's other battery recycling factory located in St. Micklosh, Sigat, has also been fined multiple times for seriously endangering employee safety; In March, an explosion occurred at the factory, resulting in the death of two workers and one serious injury.

According to reports, if the factory located in B á tonyterenye can create legal conditions for operation, the factory can resume operations and also need to address the issue of excessive waste storage.

In response to this, another opposition party in Hungary, the Green Party, stated in a statement that although the decision was delayed, it was forward-looking. But for the safety of the people, factories should be permanently closed instead of indefinitely closed. Because there is no guarantee that this company, which has repeatedly violated regulations, will comply with them in the future, permanent closure is the most reassuring solution.

"Either already in Hungary, or on the way to Hungary"

According to data, in the first quarter of this year, the share of electric vehicles in the Hungarian new car market increased from 4.4% to nearly 6%, surpassing the Czech Republic's 2.4%, Poland's 3.3%, and Slovakia's 1.8%.

Thanks to its superior transportation and geographical location, profound automotive industry heritage, and a series of favorable investment conditions from the government for the new energy vehicle industry, Hungary, a small European country, is attracting more and more Chinese new energy lithium battery companies to invest and establish factories in the local area.

In addition to CATL, there is also Huizhou Yiwei Lithium Energy Company among battery companies. In June this year, it announced that its wholly-owned subsidiary Yiwei Hungary will invest in the construction of a large cylindrical battery production project for electric passenger vehicles in Hungary, with an investment amount not exceeding 9.971 billion yuan, and will be completed in stages within 4 years. The Yiwei Lithium Energy Hungary investment project will mainly supply large cylindrical batteries to BMW Group's Debrecen factory in Hungary, and the phased implementation of the project will be fully put into operation by 2026.

In August, another domestic battery company, Xinwangda Electronics Co., Ltd., announced that its subsidiary, Hungary Xinwangda Power Technology Co., Ltd., will invest approximately 1.9 billion yuan in Hungary to build the first phase of a new energy vehicle power battery factory project.

BYD recently plans to build a brand new battery assembly plant in Hungary, with an expected investment of over 200 million yuan. After the completion of the new factory, it will be BYD's second factory built in Hungary, following the Hungarian pure electric bus factory.

In addition, battery material companies such as Enjie Group and Huayou Cobalt Industry, as well as battery equipment companies such as Hangke Technology, have also announced plans to invest in building factories in Hungary. On June 21st, nickel cobalt leader Huayou Cobalt announced that the company plans to invest in the construction of a ternary positive electrode project for high nickel power batteries in Hungary through its controlling subsidiary Bamo Technology Hungary Kft, with a total planned investment of 1.278 billion euros.

On July 3rd, the first coating production line of Enjie, a leading company in battery separators, started trial production in Hungary, marking a milestone and crucial step for Enjie in accelerating its overseas layout process. The total investment of the Enjie factory in Hungary is approximately 340 million euros, with plans to build four diaphragm production lines and multiple coating production lines.

However, looking at the series of experiences experienced by the battery leader CATL in Hungary, in Europe where environmental and labor related policies are extremely strict, to achieve localized operations, Chinese enterprises still need to be as familiar as possible with local environmental and labor laws and regulations, and make comprehensive designs and compliant operations to avoid risks.

Not only that, enterprises should also fully understand the local political situation. According to a previous article by the Chinese Academy of Social Sciences titled "Thirty Years of Hungary's Transformation: Changes in Political Party Structure", taking Hungary as an example, the current left-wing party in Hungary mainly includes opposition parties such as the Hungarian Socialist Party, the Democratic Union, and the Hungarian Dialogue Party, as well as the center left Hungarian Green Party and the Liberal Party. The right-wing are mainly the ruling parties, the Youth Democratic League and the Christian Democratic Party, while the representatives of the extreme right-wing are the Ubik Party.