The gigantic Chinese lithium battery factory under construction for three years on the edge of Hungary’s second biggest city hasn’t started production yet.
But it has already contributed to a political earthquake.
As the biggest Chinese investment in Europe, the $8.5 billion project in the eastern city of Debrecen had been hailed by Hungary’s outgoing prime minister, Viktor Orban, as proof of the economic benefits of his close relations with China.
Instead, the factory helped bring about his downfall.
In the April 12 election, Mr. Orban’s Fidesz party lost all its seats in Parliament from Debrecen, long a bastion of rock-solid support for the party, to the upstart Tisza movement, whose leader, Peter Magyar, is set to be sworn in as prime minister on Saturday in Budapest, the capital.
Tisza railed against the risks of toxic waste and the lax enforcement record of environmental regulations by Mr. Orban’s government. That message resonated in a city where many voters strongly opposed the factory, worried about their health, water supply and the closure of a railway line that crosses land bought by the Chinese company.
Mr. Magyar has now promised to “review,” but not halt the battery plant, as he tries to balance the demands of his voters for greater scrutiny of potential environmental hazards with his promises to revive Hungary’s sluggish economy.
Mr. Magyar has made clear that his initial priority is to soothe strained relations with the European Union and unblock nearly $20 billion in frozen funding. What to do about the factory, an emblem of Mr. Orban’s close economic and political relations with China, will be an early test of whether he wants to continue an effusive friendship that some see as at odds with the E.U.’s view of China as a “systemic rival.”
The battery factory was built by Contemporary Amperex Technology Ltd, or CATL, a privately owned Chinese manufacturing giant, and the world’s biggest supplier of batteries for electric cars. It is designed to supply German carmakers, like Mercedes-Benz and B.M.W., whose plants in Hungary are pillars of the economy and depend on Chinese batteries for their electric vehicles.
Aside from the Chinese factory, “there was no other important campaign issue in Debrecen,” said Zsolt Porcsin, the editor in chief of Debreciner, an online news portal that reported regularly on street protests and lawsuits against the factory by angry residents.
By contrast, the campaign by Mr. Orban, who cozied up to Russia despite Hungary’s membership in the European Union, focused on stoking fears of Ukraine. Tisza candidates attacked Mr. Orban’s party as out of touch with voter concerns and too focused on serving the interests of foreign powers like Russia, China and President Trump’s America.
Local hostility to the Chinese battery plant “definitely hurt us in the election,” Laszlo Papp, the mayor of Debrecen and a member of Fidesz, said in an interview. “We did not talk about issues that people were interested in.”
An opinion poll of 1,000 residents, taken at the start of the project in late January 2023, showed that a majority thought the battery plant would be harmful.
CATL mostly ignored that public hostility.
The company’s approach was shaped by the way things work in China, said Viktor Eszterhai, a China expert at the Ludovika University of Public Service in Budapest, who has studied Hungary’s emergence as a European hub for battery and electric vehicle manufacturing.
“They thought: ‘We agreed with the government. We don’t need to deal with what local people think,’” he said.
CATL, in response to written questions, said it could not comment on “political statements” by the Fidesz mayor or Tisza members of Parliament. It declined to address complaints from residents that the company had ignored their concerns. It said it had tried to “become a good neighbor” by supporting a local pediatric clinic, a flower carnival and other events.
CATL still needs final permits before it can start production. Since the election, it has rushed to build bridges with Hungary’s post-Orban political order.
Zsolt Tarkanyi, one of Tisza’s victorious Debrecen candidates and a loud critic of the factory during the campaign, said the company had contacted him and other Tisza legislators soon after Mr. Orban’s defeat.
Last week, senior CATL executives from China flew to Budapest for a hastily arranged meeting with Hungary’s incoming Minister of Economy and Energy, Istvan Kapitany, who has pledged to review state subsidies given to foreign companies.
In the case of CATL, Mr. Orban’s government had promised subsidies that the company says are worth around $350 million. Hungarian media reports have put total state aid, including tax breaks and other favors, at over $900 million. The terms of the original deal in 2022 between CATL and the Hungarian government are secret.
Mr. Tarkanyi said in an interview that under Mr. Orban, battery factories already up and running in Hungary, including those of South Korean and Japanese companies, “basically did whatever they wanted.”
This, he added, “would come to an end.”
He said battery factories would now be subjected to rigorous inspections, heavy fines or suspended operations, in the case of repeated violations. A South Korean plant already operating for years has been repeatedly fined modest amounts.
Hungary under Mr. Orban became China’s most reliable friend in the European Union, embracing an “all-weather comprehensive strategic partnership,” a term adopted during a 2024 visit to Budapest by the Chinese leader, Xi Jinping.
That partnership was a sharp divergence from the E.U.’s increasingly jaundiced view of China because of a torrent of Chinese exports to Europe that threaten European manufacturers and its support for Russia in the war in Ukraine.
Wary of E.U. hostility, Beijing in turn has looked to strongman European leaders like Mr. Orban in Hungary and President Aleksandar Vucic in neighboring Serbia.
Their countries seemed to offer a space free of criticism and, in the case of Hungary, a back door to the European market in the event of high E.U. tariffs on electric vehicles, batteries and other goods made in China. Hungary is the largest single destination for Chinese investments in Europe, with several battery factories and a large BYD electric vehicle plant.
But voters in Debrecen showed the limits of Beijing’s approach.
“Sooner or later they will realize this is not a good strategy,” said Agnes Szunomar, a China expert at Corvinus University in Budapest. “It works in authoritarian regimes where one man stays in power for decades, but in democracies it shouldn’t work.”
For Mr. Orban’s Fidesz party, it didn’t.
Judit Szeman, whose family farm sits just a few hundred yards from the hulking factory, said she had voted for Fidesz in the past but lost all trust in Mr. Orban because of his support for the Chinese project.
Mr. Orban’s crushing defeat has given her some hope that the new government might start enforcing environmental regulations, but she’s not dropping a years’ old legal case that she and other residents filed to challenge the factory’s environmental permit.
Her 83-year-old mother refuses to leave, she said, “so we have to keep going,” even though, she added, “this place is becoming unlivable.”
Floodlit at night, the factory is so bright that it makes sleeping difficult, she said, and, though not yet producing, emits strange grinding noises “like 10 tractors.”
Eva Kozma, a Debrecen resident who has been organizing protests against the battery plant for years, said she was disappointed that Tisza has not come out in favor of shutting the factory down but still thinks that might happen.
“People say the factory has been built so we can’t do anything,” she said. “But I tell them: ‘Would you have ever thought that Viktor Orban who had all the money and power would ever lose an election?’ ”
