Hungary's Post-Orbán Era: Péter Magyar's Government Probes BYD Szeged Factory Subsidies Amid Corruption Scandal
In a seismic shift for European politics, Hungary is undergoing a rapid transition following the defeat of long-time nationalist Prime Minister Viktor Orbán in the April 2026 parliamentary elections. The new pro-Brussels government, led by Prime Minister Péter Magyar and his Tisza Party, has launched a comprehensive campaign to dismantle Orbán-era illiberal infrastructure1. As part of this drive, the new administration has initiated a major investigation into the massive state subsidies, tax breaks, and environmental exemptions previously granted to Chinese EV giant BYD for its flagship European factory in Szeged.
The €4 billion Szeged plant—once hailed as a crowning achievement of the Orbán government’s "Eastern Opening" policy—has become the center of intense legal, labor, and political controversies. The factory is currently facing 29 active police investigations, severe allegations of forced labor involving Chinese guest workers, and a high-profile corruption scandal involving former Foreign Minister Péter Szijjártó, who negotiated the deal and recently resigned from parliament to join BYD.
The Szeged Factory Investigations and Labor Abuses
According to Hungarian media, the Criminal Department of the Csongrád-Csanád County Police Headquarters is investigating 29 separate cases connected to the Szeged BYD plant, several of which relate to hazardous working conditions. The site has been marred by two fatal workplace accidents in a matter of months: one worker died during crane operations, and another Chinese worker was killed after being struck by a truck.
Furthermore, the New York-based watchdog China Labor Watch has uncovered conditions on-site that strongly suggest forced labor. Chinese guest workers—whom the Orbán cabinet had promised to bring in by the thousands—are reportedly subjected to extreme exploitation, working shifts of 9 to 12 hours a day, seven days a week, with part of their wages withheld. Many of these workers reportedly lack legal Hungarian work permits.
Environmental violations have also surfaced. Authorities discovered that soil contaminated with alkylbenzenes was unlawfully spread over 20 hectares of agricultural land, forcing local farmers to destroy their crops. Despite the severity, the previous government fined BYD a mere 10 million forints (€25,000). Hungarian subcontractors have also reportedly walked off the site due to non-payment by BYD.
The Szijjártó Corruption Scandal and the Fall of Fidesz
The political fallout intensified following the announcement that former Minister of Foreign Affairs and Trade Péter Szijjártó has resigned from parliament to become BYD's new global head of external relations. Because Szijjártó was the primary architect of the state-subsidized deal that brought BYD to Hungary, his immediate transition to the Chinese automaker has triggered severe conflict-of-interest and corruption allegations.
This corporate transition coincides with a broader, aggressive anti-corruption campaign by PM Péter Magyar's government. Just months into its tenure, the new administration has pressured Orbán-era Prosecutor General Gábor Bálint Nagy into resigning, passed a constitutional amendment to oust Orbán-appointed President Tamás Sulyok, and authorized prosecutors to raid offices housing data servers used by Orbán's Fidesz party as part of an embezzlement investigation. Fidesz has retreated into what Orbán calls "resistance politics," signaling the collapse of the MAGA-Hungarian illiberal alliance that Orbán spent years constructing.
"If a former state leader leaves politics and immediately goes to work for a company that places a premium on state connections — indeed, the Szeged BYD plant received billions in state support precisely during Szijjártó’s ministership — that represents a serious corruption risk and, at the same time, a conflict-of-interest problem" — Magyar Hang, quoted in Daily News Hungary
"The company’s flagship factory site under construction in Szeged has come under scrutiny over alleged labour abuses by subcontractors, while a change of government in Budapest has triggered a probe into the massive state subsidies, tax breaks and environmental exemptions previously granted to BYD." — The Business Times
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An instance of Ideological foreign alignments cannot survive a change in domestic leadership. — A change of government in Budapest has prompted immediate investigations into Chinese investments championed by the previous administration. ↩︎