Will BYD replace Toyota as top global automaker?

Mark O'Neill July 23, 2026 13:18

This week Hungarians were astonished to learn that the man who was their Foreign Minister for nearly 12 years had resigned his seat in Parliament to work for Chinese automaker BYD.

On his Facebook page, Peter Szijjarto said that he had received “a highly prestigious offer to fill an international executive position.”

“BYD is one of the greatest success stories in the automotive industry over the past 20 years,” he said. “Starting today, I will continue to work as the executive responsible for the group’s external relations and development of new business lines.”

In June, Wang Chuanfu, BYD’s founder and CEO, announced that his firm would surpass Toyota of Japan as the world’s biggest carmaker in terms of sales by 2031, even without access to the U.S. market.

In 2025, BYD sold 4.5 million cars, compared to 10.5 million by Toyota, which is heavily dependent on the U.S. and continued internal-combustion models.

Wang’s promise was greeted with scepticism by those in the industry. The U.S. market is the second largest in the world, after China.

Stella Li, head of the firm’s international sales and its face in Europe, said that it would surpass Toyota through its own organic growth and without acquisitions. “We do not need the U.S. market to achieve that.”

Wang’s ambitious promise spread alarm through car producers in Europe. Sales in the Europe last year were 13.27 million, up 2.4 per cent year-on-year and making it the world’s third largest market after China and the U.S.

To achieve his aim by 2031, BYD must take major market share from these producers in Europe.

Last year total electric car sales in the European Union increased by 29.9 per cent to 1.88 million, a 17.4 per cent share of new car sales.

In the first four months of 2026, BYD sales in Europe nearly doubled to 120,000 units, with the UK as the biggest market – 37,995 vehicles sold in the first half of the year, up 95 per cent. It is rapidly expanding its retail footprint in Europe, with 2,000 points of sale.

Like other Chinese EV makers, BYD needs the export market to survive savage price wars at home that make sales unprofitable.

In March, the firm announced full net year profits for 2025 of 32.6 billion yuan, down almost a fifth from 2024. As of March this year, it had falling sales of EVs for six consecutive months because of this competition and the ending of many government subsidies last year.

In a sign of how dependent Chinese automakers are becoming on overseas markets, China’s auto exports reached a record one million for the first time in June.

Hungary is critical to BYD’s ambitions in Europe. It is building its first European factory in Szeged, Hungary, allowing it to avoid the European Union's import tariffs on Chinese electric vehicles. It imposes tariffs of up to 35.3% on Chinese-made battery vehicles applied on top of its standard 10% car import duty. Individual manufacturer rates vary based on their cooperation with the EU's anti-subsidy investigation. BYD pays 17 per cent.

The Szeged plant has begun trial operations, with full-scale series production of the compact Dolphin Surf EV due to begin in the fourth quarter of this year. It is planned to reach a final annual capacity of 150,000 to 300,000 vehicles.

The government of Victor Orban, which fell from power in April, sought to position Hungary as a global hub for EV manufacturing, offering investment aid to several Chinese battery plants as well.

After Szijjarto’s resignation, Hungary announced an investigation into state subsidies granted to BYD. "We will examine all the decisions, negotiations and state commitments made by Péter Szijjártó related to the BYD Hungary investment," Prime Minister Péter Magyar said.

"We will investigate who made these decisions, who prepared them, what professional warnings were ignored, and how much burden they left on Hungarian taxpayers, workers, local communities and the environment," he said.

Stella Li’s comments on acquisitions indicate that BYD seems unlikely to buy or invest in European automakers. In 2025, Renault rejected overtures from BYD for a stake, people in the industry said.

Li said that she would be open-minded if an opportunity arose to buy a European premium brand. “I do not have a specific brand in mind and have not been approached by any potential target,” she said.

Should a European automaker seek BYD as a partner?

Mark O'Neill

A Hong Kong-based writer, teacher and speaker.