Introduction

China’s investment in Europe has been an important aspect of its globalization strategy. In line with the global trend toward electrification, the focus of recent Chinese investment in Europe has shifted to the field of electric vehicles (EVs). China is currently dominating the global EV production and sales market, as well as the EV battery manufacturing industry. In 2022, China’s battery manufacturing capacity was 77%, more than the rest of the world combined (Bhutada and Parker 2023). Thus, battery investment is China’s backbone for controlling the EV battery supply. As the European Union (EU) leads the way in implementing a ban on carbon-emitting vehicles by 2035, the rising EV demand presents an opportunity for China to expand its EV value chain in Europe. Hungary, the first EU member state to join China’s Belt and Road Initiative, has emerged as China’s most significant partner in Central and Eastern Europe (CEE). Over 33 Chinese firms from diverse industries have invested in Hungary since 2005 (Völgyi and Lukács 2021). Following in the footsteps of earlier Chinese investments, a growing number of Chinese EV-related companies are establishing local plants in Hungary to expand into the European market.

The recent battery investment by Contemporary Amperex Technology Co., Limited (CATL) in Debrecen, Hungary, is the largest and becomes the most contentious case under the limelight. CATL, the world’s largest battery manufacturer, built its first European base in Germany in 2020 and started producing battery cells in 2023. Following its success in Germany, CATL planned to build Europe’s largest battery plant in Hungary by 2025. Although the Hungarian national government and local authorities unanimously supported this mega gigafactory, it has provoked heated disputes among opposition parties, experts, and local communities. According to a public opinion survey conducted by a Hungarian independent think tank, between January 28 and February 1, 2023, only 19% of Debrecen residents supported the CATL battery construction. What’s more, 64% rejected the project and supported the calling of a referendum to stop the CATL project. 50% believed that the detrimental health and environmental effects of the battery factory outweighed the economic benefits (Flachner 2023). The resistance expressed at public hearings, demonstrations, and protests against CATL has also had a ripple effect on other battery projects in Hungary and public trust in state and local governments.

How come CATL’s plan for a second gigafactory aroused fierce opposition from local communities in Hungary despite its early success in Germany? How is the debate concerning the CATL project presented in the Hungarian media? To examine the controversies of the support and opposition to the Chinese battery investment, I collected a total of 981 Hungarian news articles about CATL’s investment in Hungary from 21Footnote 1 prominent Hungarian news portals, spanning from April 2022 to February 2024 (see Table 1). Drawing on content analysis, I analyzed the overall sentiments about CATL’s battery investment in Hungary by divergent media outlets with different political orientations (Matura 2018). Using narrative analysis, I further investigated how narratives in the Hungarian media consolidate the support and opposition to the CATL project.

Table 1 Media sentiment on CATL among 21 major Hungarian media outlets (N = 981)
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This article begins with the background and context of CATL’s investment at a junction of China’s expansion and Hungary’s ambition in the global EV race. Then, I will discuss methods used for data collection and analysis on the support and criticism of CATL’s battery investment in the Hungarian media outlets. The findings shed light on the controversial debate over the case of CATL in Hungary and offer significant implications for Hungary and other integrated peripheral countries in Europe competing for foreign battery-related investments. Moreover, the findings suggest the importance of implementing locally tailored corporate social responsibility initiatives to ensure the successful and long-term development of Chinese investments in the host country.

Background and context

Upgrading in the global value chain: when China’s expansion meets Hungary’s ambition

The promotion of clean energy toward electric vehicles (EVs) has resulted in a massive restructuring of the global automotive industry in the last decade. Initially, China fell within the category of “a big emerging market” based on its position within the global value chains and production network of automakers (Sturgeon and Florida 2000). According to Pavlínek’s (2018) “core—semi-periphery—integrated periphery” categorization, China exhibits characteristics of both the core and integrated periphery in the global EV value chain (Mordue and Sweeney 2020). On the one hand, China has established several domestic automakers, including Shanghai Automotive Industry Corporation (SAIC Motor), BYD, and Geely. On the other hand, as automobile foreign direct investment (FDI) inflows continue to outpace outflows, the Chinese automotive sector remains significantly dependent on labor-intensive and low-cost components.

In the past decade, China has been striving to lead the global energy transition and aspires to achieve full membership in the “core” group with the United States and Germany. Since 2009, the Chinese government began to focus on developing the new energy industry, particularly EVs, through subsidy policies (The Central People’s Government of the People’s Republic of China 2009). Thanks to the state aid policies for the new energy development, the growth of production and sales of EVs in China has been far ahead of other regions in the world. By 2022, China has already become the largest EV market, accounting for around 60% of the share of global new EV sales (International Energy Agency 2023). Moreover, China is projected to continue to dominate the global lithium-ion battery supply chain due to its vast dominance of battery cell manufacturing capacity and raw material production (BloombergNEF 2022). However, starting in 2023, the Chinese government stopped the purchase subsidy for EVs, and the domestic EV market is close to saturation. In the meantime, Europe aims to phase out all petrol- and diesel-powered cars by 2035 while the region currently has few major battery makers. This offers lucrative opportunities for China to establish a foothold in the European market and augment its automobile FDI outflow. Additionally, locating Chinese battery and other component manufacturers within the EU lowers customs expenses and avoids the carbon charges that the EU would impose on imported goods with a high carbon footprint. As a result, a growing number of Chinese battery and EV manufacturers, such as BYD and CATL, target the EU market and are ramping up expansion plans in Europe.

Hungary is a prime example of an integrated periphery country in the global automotive industry (Mordue and Sweeney 2020; Pavlínek 2018, 2022). Due to low production costs, Hungary has been incorporated into the global automotive value chain since the 1990s. With over 700 component suppliers and assembly facilities for main foreign-owned automotive manufacturers, Hungary ranked nineteenth in the world in automobile exports from 1998 to 2016 (Natsuda et al. 2022; Török 2022). Although Hungary is considered a peripheral region that focuses on labor-intensive production and low-value-added activities, the automotive industry is a prominent sector domestically, contributing around 5% to the national GDP, 25% to value-added, and 21% to exports (Szabo et al. 2023). Following international efforts to combat climate change, the transition from internal combustion engine (ICE) vehicles to EVs has become a global trend. Particularly, under the Paris Agreement, all EU member states have committed to a binding target of at least 55% decarbonization by 2030 compared to 1990 and a 2035 ban on ICE vehicles. This abandonment of ICE vehicles poses a great challenge and threat to the traditional automobile industry. Nevertheless, the transition to electromobility provides Hungary with the chance and possibility to progress into a semi-peripheral position in the emerging global EV value chain by attracting EV manufacturers to invest in Hungary.

Given the longstanding dependent peripheral position in the European automobile production system, Hungary is not and is less likely to become a hub of innovation for electromobility (Pavlínek 2023). To be a forerunner in the transition to net zero emissions, Hungary released its national ambitions related to batteries in September 2021Footnote 2 after the launch of Swedish and Finnish national battery strategies. According to the Hungarian Battery Industry Strategy 2030,Footnote 3 the government prioritized the development of electromobility and provided substantial subsidies and infrastructural support to attract battery-related investments. Hungary strives to pursue its EV domination in Europe by integrating East Asian battery manufacturers with Western European automakers and developing a complete battery value chain (Czirfusz 2023). As shown in Table 2, there have already been more than 40 FDI projects related to EV and battery manufacturing, including the largest investment from CATL.

Table 2 Summary of EV and battery-related investment in Hungary (as of February 2024)
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The case of CATL and its global expansion

Contemporary Amperex Technology Co., Limited (CATL, 宁德时代 or the Era of Ningde), which made the biggest greenfield investment in Hungary, is China’s and the world’s largest battery producer. CATL is derived from ATL manufacturing batteries for cell phones and other portable devices. In response to the Chinese government’s green development strategy, which offered subsidy support for the domestic EV industry in 2009, the founder, Yuqun Zeng, launched CATL in 2011 in Ningde in the Fujian province of China, with a focus on EV battery manufacturing and technology innovation. Thanks to its rapid domestic market expansion and growth, CATL outpaced its competitors Panasonic and LG and became the world’s largest manufacturer of lithium-ion batteries for EVs (Sanderson 2022). CATL is now leading the EV battery supplier with a market share of more than 48% in China and 24% globally. Major EV makers like BMW, Volkswagen, and Tesla heavily rely on CATL for their EV production, and thus, about one in three EVs in the global market have a CATL battery (CATL 2023). To maintain its dominating position in global electrification, CATL has expanded its ambition beyond battery production to include the entire battery supply chain, from raw material processing to battery cell production and battery recycling at a global scale.

Despite having its headquarters, manufacturing base, and Research and Development (R&D) center mainly situated in Ningde, China, CATL has been expanding its production network to encompass countries across the globe. To date, CATL has five R&D centers,Footnote 4 13 manufacturing bases,Footnote 5 and 21 subsidiariesFootnote 6 globally. CATL also plans to establish a new R&D center in Hong Kong and invest in lithium extraction plants in Bolivia. Like other Chinese EV battery providers, CATL focuses on its overseas expansion in Europe in response to the US Inflation Reduction Act, which aimed at reducing the reliance of the US on China. Furthermore, considering Europe’s status as the second-largest global EV market and its scarcity of domestic battery manufacturing capacity, CATL has established multiple partnerships with European automakers. To maintain cost competitiveness and facilitate further expansion, CATL has chosen to localize battery manufacturing in Germany first and then in Hungary.

The fact that CATL chose Hungary as the location for its second and largest gigafactory in Europe satisfies the criteria for manufacturing localization decisions (Andersson et al. 2001, Johansen and Winroth 2003). First of all, “market-seeking” and “efficient-seeking” are probably the most important motivations influencing CATL to choose Debrecen as the location for its largest battery factory in Europe (Szunomar 2020). Because of its central location in Europe, a long history of vehicle production with low production costs, favorable tax reductions, and infrastructural incentives, Hungary has attracted major EV manufacturers that rely on CATL batteries. CATL’s new plant is a project that aligns with the new BMW EV facility in Debrecen. The decision on Debrecen also strengthens CATL’s partnerships with Mercedes-Benz in Kecskemét and potentially other new EV makers in Hungary. Not only are CATL’s primary clients centered in Hungary, but its principal suppliers have also moved here. For example, in 2020, SEMCORP, CATL’s primary supplier of separators, selected Debrecen as the location of its first overseas plant. As a result, Hungary serves as an efficient platform for coupling Chinese battery producers and German EV manufacturers to create a local supply base across the entire value chain in the global EV production network (Yeung 2015). Moreover, as an EU member state, Hungary has strong diplomatic ties with China ensuring a stable political climate for CATL’s investment. Hungary also boasts the largest Chinese community in Central Europe, with a growing number of Chinese investors and businesses. For example, CATL has decided to handle its accounts with the Bank of China in CEE, which is based in Hungary.

Methods

To investigate the representation of CATL’s investment in the Hungarian media, the first step was to select a sample of Hungarian news that specifically addressed the investment of CATL in Debrecen. I used purposive convenience sampling to select Hungarian media outlets that cover news on CATL. I sought advice from Hungarian locals and compiled a list of prominent Hungarian media outlets with diverse political orientations. In total, I included 21 Hungarian media outlets for the analysis: 7 were pro-government, 3 were neutral, and 11 were critical of the government. Table 1 presents the information of all sampled Hungarian media outlets using the inclusion criteria. Next, for each Hungarian media outlet, I conducted a keyword search for “CATL” in each Hungarian media outlet during the period from April 2022Footnote 7 to February 2024. Then, I translated each news article into English using Google Translate and perused each article to ensure that its primary content was indeed pertinent to CATL’s investment. Finally, I selected 981 qualified news articles as the sample for the analysis.

Initially, I analyzed each news article to evaluate the overall sentiment of each piece. I assigned a value of 1 to indicate if the tone and content of CATL are mostly positive, − 1 to indicate if they are predominantly negative, and 0 to indicate if they are mixed or neutral. Table 1 displays the average sentiment of the coverage of CATL among the Hungarian news portals. The overall average sentiment of 981 news articles is slightly negative with a value of − 0.027. Looking more closely at each Hungarian news portal and its political orientation, we can find a clear political divide regarding the sentiment of the CATL project. The pro-government media aligns with the state’s interests and provides a more positive picture of the CATL project, while the media that is critical of the government tends to cover more negative news regarding CATL. Next, building upon the positive and negative sentiments, I focused on how narratives support and oppose the CATL project. Using narrative analysis, I engaged in an iterative process of coding and developed four recurring themes associated with the positive and negative sentiments of CATL’s investment: economic powerhouse, green technology, unmatched resource drain, and uncertain risks. The following two sections will depict how narratives in the Hungarian media consolidate the support and opposition to CATL’s investment.

The endorsement of CATL’s investment in Debrecen, Hungary

The Hungarian government under Viktor Orbán has worked to strengthen Sino-Hungarian ties over the past decade. As shown in Table 1, pro-government media coverage of CATL was all positive and in favor of the investment. CATL’s mega project was portrayed as a showcase of Hungary’s strategic partnership with China, as well as a victory over a massive competition to attract such investment. Overall, their support for the CATL battery plant primarily focused on the national and local economy and green technology innovation.

CATL as an economic powerhouse

Because the forthcoming CATL gigafactory in Debrecen will be the largest EV battery plant in the entire EU, the Hungarian government is certain that this giant investment will turn Hungary into an economic powerhouse. Numerous news highlighted the total volume of the investment, 7.34 billion euros, because it was a record-breaking investment in Hungary’s history. Moreover, many news articles posit that the launch of the CATL factory will open 9000 new job opportunities and promise to rely predominantly on the Hungarian workforce. Because the factory will be automated, CATL will hire more highly skilled workers, such as machine operators, engineers, and technical professionals. Also, CATL claims to work with educational institutions to help create the skilled workforce of the future.

At the country level, as the new EU law prohibiting the sale of petrol and diesel automobiles beginning in 2035 accelerates the transition away from fossil fuel–powered vehicles, zero-emission EVs have been dubbed as the future of the automobile industry as well as the future of the Hungarian economy. CATL is one of the projects and the largest investment that fits Hungary’s National Battery Industry Strategy 2030 and will encourage other Chinese and East Asian battery companies to invest and boost Hungary’s position as a major global EV center. For instance, Péter Szijjártó, the Hungarian Minister of Foreign Affairs and Trade, asserted:

We acknowledge and highly appreciate that Chinese companies bring state-of-the-art technology to Hungary ……CATL’s project is also significant because after China and Germany, we will be the third country where the company establishes a plant, and consequently, three out of the six largest e-battery manufacturers in the world will be present in our country.Footnote 8

At the city level, László Papp, the Mayor of Debrecen, from the Hungarian governing party, Fidesz, prioritizes electromobility and energy storage as two pillars of Debrecen’s economic strategy. He appraised the establishment of CATL as it is in line with Debrecen’s green transformation and future development:

Electromobility and energy storage will be our two priorities. These are decisive areas for industries globally and in this century. I cannot imagine the green transition to be possible without energy storage. We know that the future of Debrecen will be written over by the arrival of these two companies. We had to change a lot of features in the city to accommodate these two giants. Both BMW and CATL will be decisive factors that will not only impact our population but also the education programs that we offer.Footnote 9

Moreover, the investment of CATL will not only generate substantial tax revenues for the city but also attract more foreign investment and help the city establish an EV production network. As Debrecen’s growing Economic Zone, the Southern Industrial Park has already attracted several enterprises, including Krones, Deufol, Vitesco Technologies, and the logistics center of BHS Trans. Since 2018, BWM Group has been building its first carbon–neutral factory in Debrecen with plans to operate in 2025. Three months after CATL’s Debrecen factory was announced in August 2022, BMW chose to extend its investment in the Debrecen plant to include a battery assembly facility with 1000 additional employees. Following CATL’s investment, several other battery companies also announced their plans to set up factories in Debrecen, including EVE Power from China and EcoPro BM from South Korea. When the EV value chain is set up, there will be opportunities for local businesses in other sectors, such as software development and logistics, to participate in and support the EV value chain.

CATL as a green technology

EVs are propelling the green transition for climate sustainability. The battery is the most crucial and expensive component of an EV, accounting for 30 to 50% of the total value, and thus, the production of EV battery cells is at the core and forefront of green energy technology (Berthold et al. 2022). CATL is now the world’s largest EV battery cell manufacturer, dominating the production and technology of lithium iron phosphate (LiFePO4 or LFP) batteries. CATL’s LTP battery products are less expensive, lighter, and of superior quality and performance than nickel-based and cobalt-based EV batteries. As the supplier of 30 automotive brands, CATL maintains a dominating position, with a considerable market share of EV battery manufacture. According to Péter Szijjártó, the Minister of Foreign Affairs and Trade, CATL is a “green battery factory” that will deliver cutting-edge battery technologies and high-added value products.

This contributes to the development of Hungary’s competitiveness within Europe, as Chinese investments bring state-of-the-art technologies to their new units, and in addition, investments in the electric car industry ensure that Hungary remains at the forefront of the fight against climate change. Every person who feels responsible for the environment can be proud of this.Footnote 10

When local communities expressed concerns about the environmental safety of CATL’s battery production, the mayor of Debrecen, László Papp, and the deputy mayor, Lajos Barcsa, visited CATL’s Arnstadt plant in Germany. They shared their experience on social media and attempted to use the “model project” in Germany that they had seen to confirm that the same plant would work properly in Debrecen. They argued that the CATL factory has been praised and embraced by the left-wing and pro-green German government, indicating a risk-free environment.

The CATL factory in Arnstadt works with the same - currently known as most modern - technology as the plant planned for Debrecen. We could see this with our own eyes. The factory represents the highest technological standards of the 21st century. We did not see any pollutants or sources of danger, the plant operates in full compliance with German safety and occupational health regulations.Footnote 11

In addition, many news articles cited positive views from experts and environmental organizations, including Máté Litkei, the director of the Climate Policy Institute, Hungarian Battery Association, Greenpeace Hungary, and the World Wide Fund for Nature (WWF) Hungary, as evidence to support the CATL’s battery factory. For example, the WWF essentially supports battery manufacturing for the sake of air pollution reduction. Regarding potential risks of battery production, according to Péter Kaderják, the executive director of the Hungarian Battery Association, it does involve chemical processes that may result in pollution. However, strict environmental regulations in Hungary and the EU will ensure that no substances escape and pollute the environment. He also mentioned BorsodChem, a Hungarian chemical factory acquired by a Chinese corporation, as an example to reassure the public that any possible chemical pollution is under control.

There are strict Hungarian and European rules for this. Our country’s chemical industry is extremely developed anyway. I think our institutional system is prepared to impose and enforce these rules.Footnote 12

The criticism of the CATL’s investment in Debrecen, Hungary

Before the official announcement on August 15, 2022, only a limited number of people in Hungary were aware of CATL’s substantial investment. In the absence of more specific information, queries and doubts from representatives of several opposition parties have heightened public concerns and fears. To date, according to news reports, there have been at least 13 major protestsFootnote 13and numerous demonstrations against the construction of CATL’s battery factory in Debrecen and its neighboring town, Mikepércs. Resistance toward the Chinese gigafactory mainly stemmed from worrying signs about the factory’s high demands for water and energy, risks of pollution, and a threat to locals’ health and quality of life. Even after the Hajdú-Bihar County government office granted an environmental use permit to CATL based on strict environmental protection frameworks on February 13, 2023, locals and opposition parties continued criticizing the unclear environmental consequences of the battery factory.

CATL’s unmatched resource drain: water and energy crises

Debrecen is far from a large river with an abundance of water. As a result of climate change in recent years, Debrecen and its surrounding areas have already been at risk of desertification, particularly following a severe and persistent drought in the summer of 2022. To alleviate Debrecen’s water shortage, the city government launched the Civaqua program,Footnote 14 which aims to bring water from the Tisza River to Debrecen via an artificial canal, replenishing water in the endangered lakes of Nagyerdő and Erdőspuszta and enhancing the sustainability of the environment in Debrecen.

When the first phase of the Civaqua program was not completed, the arrival of the giant battery facility raised a serious debate between the city administration and its local opposition about how Debrecen’s current water scarcity would satisfy the exceptional water demand for massive battery manufacturing. Some even questioned whether the initial goal of the Civaqua program was to provide water for battery production or whether the initial plan failed to consider the industrial water demand. In terms of how much water the CATL will require, contradicting figures emerged from various sources. For example, Mátyás Murguly from LMP, the Hungarian Green Party, said that the CATL factory would require 1000 m3 of water per hour for the operation, which is equivalent to the water consumption of 400,000 households per hour.Footnote 15 László Palkovics, the Minister of Technology and Industry, also mentioned this number based on a calculation of the capacity of the battery factory:

Everything has a price. A factory capable of producing batteries with a capacity of 100 gigawatts requires 800 megawatts of energy and also requires 1,000 cubic meters of water per hour. It’s a question of how we can reduce these levels.Footnote 16

The municipal authority of Debrecen, on the other hand, disseminated a leaflet with 13 lies and 13 truths to every household to dispel rumors regarding CATL’s battery investment. One of the 13 lies is that the CATL facility would use 40,000 m3 of water each day. According to the municipal authority, the actual number is rather 3378 m3 of water on average with 6200 m3 of water per day at maximum (Rituper 2022). The number of 40,000–60,000 m3 per day represents the total demand of the southern industrial park rather than CATL only. The data came from a study report commissioned by Debreceni Infrastruktura Fejlesztő Kft owned by the Debrecen municipality, but their report disappeared from the website of the government office 2 days after it was published (Sprik 2023). According to CATL’s safety report submitted for permit approval,Footnote 17 the expected demand for CATL’s factory is greater than that provided by the mayor but less than that declared by the Democratic Coalition (DK) representative. Rather, the consumption might range between 15,500 and 18,000 m3 per day. All the figures only refer to the first stage of the battery plant. The final stage will consume approximately 20,000 m3 per day when it starts up at full capacity.

Apart from the unresolved issue of the factory’s massive water use, another point of dispute is the energy requirement for energy-intensive battery production where there is a shortage of energy. Debrecen has no high-performance power plants nearby and Hungary relies on natural gas largely on imports due to its limited domestic production. According to the calculation from István Fábián, a professor of chemistry and the former rector of the University of Debrecen, the operation of CATL will consume 1640 gigawatt hours (GWh) of energy annually, including 1000 GWh of natural gas and 640 GWh of electricity, for a capacity of 40 GWh per year at its first stage. Professor Fábián illustrated the CATL’s production as “using the energy of forty pencils to produce one pencil” (Doros 2023). The annual energy demand for the CATL’s first phase, based on the report for the environmental permit, will be 1000 GWh of natural gas plus 700 GWh of electricity, which is equivalent to roughly 25% of the electricity produced by the Paks nuclear power plant and 10% of domestic natural gas production. Adding up CATL’s mega plant with all other battery factories, as Attila Holoda, an energy expert and the former deputy state secretary, worried, Hungary does not have enough energy for all the battery factories (Papp 2023).

CATL’s uncertain risks: pollutions and threats to health and quality of life

Another major concern mentioned by the many anti-CATL protestors is related to potential risks from waste, pollution of water, air, soil, and noise, loss of agricultural land, and interruptions of suburban life. Most of the news reporting the demonstrations and protests focused on local communities’ worries about the unforeseeable environmental damage that the operation of the battery factory would result in. First, like the conflicting data on water demand mentioned above, how high the carbon dioxide (CO2) emissions of the battery factory would produce per year also caused controversies. Some news reported 288,000 tons per year, while others argued for 500,000 tons per year. According to CATL’s report for the environmental use permit, the total CO2 emission is estimated to be 507,000 tons annually, including 288,000 from combustion equipment, 50,000 from vehicle traffic, and 169,000 from the production of the necessary electricity (Polgár 2023a). With the data, locals cast doubt on how CATL would maintain carbon neutrality as they claimed.

Second, regarding waste, much news referred to documentation from the Hajdú-Bihar County Government Office which shows that CATL’s factory will emit a total of 50,000 tons of production waste per year, of which 12,600 tons is particularly hazardous waste. According to CATL’s safety report, 1695 tons of lithium-nickel–cobalt-manganese (NCM), which is also used in Samsung’s factory in Göd, will be the largest amount of dangerous substance. Based on some experts’ examination of the CATL’s safety report, István Madarasi, a local representative of the Hungarian Socialist Party (MSZP), pointed out that the first phase of CATL’s production in Debrecen can be more dangerous than the current plant in Germany as it involves more dangerous substances (Polgár 2023b). István Fábián, a chemistry professor at the University of Debrecen, also stated that it is unclear how much hazardous waste CATL’s new factory will generate during production, and how waste will be treated. Indeed, no news articles have reported any specific prevention measures but merely a guarantee from the government saying dangerous substances will be treated in accordance with the regulations and the chemicals will be stored in tanks with protection to prevent pollutants from entering the soil and groundwater during normal operation.

Third, many demonstrators cited terrible experiences from Samsung’s battery factory in Göd and SK Innovation’s battery factory in Komárom as instances of how the construction of CATL will bring comparable misery to residents in Debrecen. For example, Zsuzsa Bodnár, a journalist at Atlatszo.hu and the president of the Göd-ÉRT Association, demonstrated that the local community has been subjected to noise pollution since the construction of Samsung’s plant. The production of the factory and the increasing traffic associated with the factory have disrupted the serenity and safety of everyone living in the area and degraded the air quality. Even worse is that lithium has been detected in the water of wells in Göd (Bodnár 2022). Many residents were unconvinced by the official justifications for converting a sizable tract of prime agricultural land to battery production. Others who left the city for a quieter area in a more natural setting feared that the factory’s coming would ruin the village and suburban way of life.

Discussion

CATL’s first European battery plant in Arnstadt, Germany, has already begun producing battery cells. On the contrary, its second and largest plant to be built in Debrecen, Hungary, has met with fierce resistance from local communities despite the embrace and support of both the Hungarian national and local governments. Based on positive and negative narratives from various sources and stakeholders, I summarize three critical reflections on the contentious issues surrounding CATL’s battery investment in Hungary.

First and foremost, the dispute over CATL’s investment in Debrecen exemplifies the politicization of battery investments and Chinese investments in the Hungarian public discourse. The right-wing Fidesz led by Viktor Orbán has been in power in Hungary since 2010. The successful completion of the CATL flagship project by 2025 along with other investments from China would demonstrate the Fidesz government’s efficacy in stimulating Hungary’s GDP, further affirm Orbán’s pro-Eastern policy, and bolster his prospects of winning the 2026 election. Debrecen has been regarded as the capital of Fidesz with a longstanding and solid position. However, since the announcement of CATL’s investment, opposition parties from distant political camps, including LMP (center to center-left), DK (center-left), Momentum (center to center-left), MSZP (center-left), the Mi Hazánk Mozgalom (right to far-right), Jobbik (center right to right), and Párbeszéd (center-left to left), all expressed opposition to CATL’s investment. CATL became a scapegoat for the domestic political tension between the Fidesz government and other opposition parties.

On the one hand, Fidesz mainly targeted the left-wing hysteria that predates the debate on CATL’s investment. The Fidesz propaganda created an image of Leftists as the instigators that stirred up tensions. They claimed that Leftists were the main force and funder behind the demonstrations and protests against the construction of all battery factories in Hungary, including CATL. Rather than promoting transparency in decision-making and keeping open to constructive criticism, the Fidesz government designated those who protested against the CATL battery facility in Debrecen as “Áldebrecen,” which is a newly created Hungarian vocabulary, meaning those who are not genuine citizens of Debrecen (Magyar Nemzet 2023). For instance, the activist organization “Mikepercs Mothers” which organized the civic demonstrations against the CATL project was labeled in the state media as “hysterical women manipulated by George Soros and the influx of funds.” Debrecen residents who were concerned about their future were characterized as rebels incited by the opposition, puppets of foreign political power, and unscrupulous troublemakers. The stigmatization of “Áldebrecen” (fake people from Debrecen) has fueled the angry moods of the local demonstrators and exacerbated tensions on the CATL project.

On the other hand, fierce opposition criticism elevated the anti-CATL campaign to the level of defending Hungary’s democracy and stopping Hungary from becoming “China’s battery colony.” Protesters accused the Fidesz government of lying, betraying, and domineering Debrecen without considering residents’ opinions and interests. The opposition politicians seized upon the public’s fury to condemn the CATL project to undermine the popularity of the Fidesz-led municipal administration of Debrecen. The anti-CATL protests further provoked anti-China and anti-Fidesz sentiments and are politicized to empower opposition parties in the upcoming municipal elections in 2024. Even though practically all opposition parties oppose CATL’s investment in Debrecen, they did not band together to focus on the environmental costs of the battery facility. Instead, they pursued separate campaigns based on their respective interests. For Hungary, the polarization and politicization of the Chinese battery investment have only increased public mistrust and conspiracy narratives, creating a no-win situation for everyone, especially the most vulnerable residents. For China, the local reactions toward the CATL’s investment in Debrecen echo the recent Hungarian public leans toward a negative view of Chinese investments and China in general (Dubravčíková et al. 2021). The dynamics of protests against CATL’s investment demonstrate how local political friction may amplify the protest-inciting impact of Chinese investments in the host country, as well as how Chinese investments may trigger anti-China rallies (Gong et al. 2024).

Second, the disputes over the CATL’s investment reveal local communities’ distrust of the Hungarian authorities and the significance of effective corporate communication with local communities. The granting of an environmental permit did not help the CATL’s project to convince the public that the battery plant would not have a detrimental environmental impact but invited more queries on the validity of the environmental impact assessment. Chinese-invested projects tend to adapt to the host country’s regulations (Carrai 2021). In Germany, CATL acquired environmental clearance from the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety, and Consumer Protection. But in Hungary, the Ministry of Environment and Water has been defuncting since 2010. Instead, the Hajdú-Bihar County Government Office acted as the environmental protection authority when it came to approving CATL’s environmental license. It is reported that CATL sent a 500-page paper in response to the government office’s 49-point request. The document aimed to clarify ambiguous sections, but no specific information is available to the public. In the absence of details on the environmental impact assessment procedure, it is impossible to convince the public that the permit was issued under “stricter conditions than ever before” as the state media asserted. Previous records show that Hungarian authorities are incapable of preventing pollution, remediating pollution that has occurred, or effectively preventing industrial accidents (Green Peace Hungary 2023). Despite complying with local rules, CATL’s project in Hungary may nonetheless generate negative environmental externalities owing to the lack of transparency and effective enforcement of these restrictions in the Hungarian context. Amidst the escalating tensions surrounding CATL, the EU Commission has intervened to investigate potential violations of the EU Water Framework Directive and the Habitat Protection Directive by the CATL project. CATL has decided to reduce the plant’s intended size and will reapply for the disaster protection license considering the escalating objections from local stakeholders. CATL may take it for granted that what works in Germany would also apply to Hungary, but local contexts matter. CATL failed to communicate with grassroots resistance proactively; rather, they relied on local politicians to give explanations and turned it into a matter of politics. Although CATL subsequently began to improve its public image by portraying itself as a responsible corporation and engaging in charitable initiatives to benefit local communities, it still has a long way to go.

Lastly, the backlash to CATL’s investment exposes local communities’ discontent with false promises made by Asian investors and the deteriorating public opinion of Asians in Hungary. The established South Korean Samsung SDI battery factory in Göd has created an unfavorable impression of the battery industry in the minds of Hungarians. Since 2018, Samsung’s Göd factory has paid 17 industrial safety and disaster prevention penalties. One of the greatest labor protection fines was HUF 10 million (roughly 30,000 Euros). Twenty-four workers were ill due to the lack of air filtration equipment. The total fines are about HUF 130 million (roughly 350,000 Euros). However, compared to Samsung SDI in Hungary’s after-tax profit in 2021 which is HUF 15.5 billion (roughly 42 million Euros), the fines are minimal.Footnote 18 It is well known that battery production is linked to electric vehicles, which have the advantage of emitting less carbon dioxide into the atmosphere. However, because of the battery plant, carbon dioxide emissions in Göd have increased fourfold. In addition, the presence of noise pollution and detected chemicals have endangered the health of both workers and residents. Not just Samsung SDI, but other battery factories operating in Hungary, such as SK Innovation, are also facing similar issues. Despite numerous irregularities and rule violations, there have been only a few cases of the prohibition on operation but no terminations on record since 2010. In 2021, Karátson Gábor Kör released a 17-min film “Akkumulátorgyárak árnyékában”Footnote 19 (literally means “In the Shadow of Battery Factories”) which discussed all the problems caused by the existing battery factories in Hungary. Hungarians see CATL as another East Asian investor and battery manufacturer, like those from South Korea, and thus, Debrecen residents are afraid of repeating Göd’s tragedy and paying a greater environmental cost for an even bigger battery plant by CATL. Moreover, Samsung’s battery factory failed to fulfill its prior commitment, and only a small portion of the workforce at the Göd facility consists of Hungarian workers. Likewise, CATL’s present operation in Germany employs around 1000 people, with 450 of them being Chinese. As a result, the possibility of CATL creating 9000 new employees in Debrecen, with a focus on hiring local workers, has been met with doubt. The influx of foreign migrant workers in the Hungarian workforce, predominantly from Asia, has already caused demonstrations, resentment, and criticism. The existing negative opinions of Asian investors and workers in Hungary complicate the settling of new Chinese investments. Therefore, despite positive diplomatic ties between Hungary and China, Chinese enterprises must endeavor to improve their image to gain public trust in the face of heightened politics and negative stereotyping of Asians in the Hungarian public discourse.

Conclusions

The development of the global electric vehicle (EV) value chain is crucial to automotive electrification and the goal of carbon neutrality. Nevertheless, investments in battery production associated with the green transition have sparked controversy in Hungary despite receiving backing from both national and local governments. The rise of globalization and global capital flows, according to Olds (1995, 2001), has caused cities to prioritize the needs of foreign investors above the interests of the local population. Locals are thus skeptical that the state will defend them against profit-driven investors, resulting in the ongoing social friction. Despite its association with green transition, the battery industry encounters substantial environmental, social, and governance concerns, comparable to raw material extraction and other industrial manufacturing (Mckinsey 2023). Due to its status as a peripheral country in the global automobile industry, Hungary’s development is highly dependent on foreign EV and battery investments. Thus, Hungary has strived to and will continue to compete with other CEE countries in the integrated peripheral position in the global EV value chain to attract FDI in the EV production and battery-related industry (Pavlínek 2023). Nevertheless, peripheral nations must not pursue FDI at the cost of the environment and the well-being of local communities. Instead, CEE countries must adhere to EU regulatory standards, strengthen continuous monitoring, and deploy greater transparency and stronger mitigation measures to ensure a sustainable global EV value chain.

Although not all these investments in electric vehicle (EV) battery plants come from China, CATL becomes a point of contention due to its potential socio-economic impacts and environmental externalities. The negative spillover effect of the anti-CATL campaign has significantly impacted new battery investments in Hungary. Recent battery manufacturing investments by EVE Power from China and EcoPro from South Korea have also experienced contestation, along with CATL. Plans for battery factories have also encountered pushback in other cities, such as Tatabánya, Hajdúszoboszló, and Szombathely. As a result, battery production has gained a contentious reputation, being associated with the energy-intensive and water-contaminating chemical plants that locals are fearful of. After the anti-CATL protests in Debrecen, Chinese battery-related investments learned the lesson and wisely avoided becoming involved in the debate surrounding the anti-battery campaign. The recent BYD investment in Szeged has strategically highlighted that it would just function as an electric vehicle assembly factory, without including the production of batteries. In contrast to the hostility faced by the CATL project, BYD’s new plan was more readily accepted by the local community in Szeged. In a similar vein, the Chinese Huayou Cobalt’s recent investment aims to establish a plant simply for battery parts rather than battery manufacturing in Ács. This study provides a limited and current snapshot of the sentiment and contested media narratives about the ongoing CATL project. One avenue for future research that focuses on the CATL case study may be to track the progress of the CATL project since the construction has already begun in the summer of 2023, and opposition remains. Another possible avenue for future research is a comparative study of other new Chinese battery-related investments, such as BYD in Szeged and Huayou Cobalt in Ács, which received more acceptance than resistance from local stakeholders.

China’s international image in Hungary remains skeptical, despite the positive relations between Hungary and China (Lai and Cai 2022). In turn, the local reception of Chinese investments may be less favorable than Chinese companies had anticipated. The contestation over CATL’s investment provides implications for improving corporate social responsibility (CSR) measures to guarantee a successful and sustainable growth of Chinese investments in the host nation. Chinese overseas projects should learn from the lessons of the smart city project in Malaysia (He and Tritto 2022). They need to be thoroughly prepared and have a comprehensive understanding of local politics and society. Merely relying on a top-down approach to establish connections with the government is not enough. It is also vital to take a bottom-up perspective and seek effective interactions with grassroots opposition. Chinese companies in Europe should pay close attention to the engagement and relations with local stakeholders and integrate social and environmental concerns into their operations, for example, by prioritizing the integration of local labor markets and supply chains, in addition to ensuring workplace safety (Mullins 2020). Nevertheless, CSR preferences differ depending on the specific circumstances of each location. Chinese investors must thus tailor their initiatives to address the specific concerns of local stakeholders to avoid any misunderstanding and improve the level of acceptance within the local community.