Hungarian Investment Promotion Agency

Based on the experience of industrial revolutions, technological transformations are characterized by an initial rapid rise, a temporary setback, followed by long-term, slower but balanced development. This pattern can also be observed in the transformation of industries, but the processes here can be significantly influenced by external shocks and cooperation within the sector.

As for external impacts, the Iran war has pushed gasoline prices to multi-year highs, the effect of which was felt almost instantly on the demand side of the automotive industry: in March, sales of battery electric vehicles in Europe rose by 51 percent. Analysts agree that in recent weeks, energy security has become the primary factor influencing vehicle choice. Anxiety over the range of electric cars, known as “range anxiety”, is thus being replaced by a new fear, “pump anxiety”, which refers to the fuel price and security of supply for internal combustion engine vehicles.

This was also highlighted in a LinkedIn article by Michael Lohscheller, CEO of Polestar, who wrote that “as fossil fuel prices surge and fluctuate, the case for electrification becomes harder to ignore”.

All of this is also important because, thanks to the investment promotion policy pursued in recent times, Hungary is playing an increasingly significant role in the transition to electromobility, which may be just reaching the stage of balanced and sustainable development.

The strengthening of Hungary's position can be further aided by the new partnership between Samsung SDI and Mercedes-Benz, which is both a response to geopolitical uncertainties and a step forward toward the next generation of electromobility.

The multi-year agreement between Samsung SDI and Mercedes-Benz covers both battery supply and joint development, and with Samsung SDI’s Hungarian plant located close to Mercedes’ factory in Kecskemét, the country is well placed to play a central role in this collaboration.

The cooperation between the two companies also extends to the field of development. It is no coincidence that Samsung SDI described the agreement signed in Seoul by saying that “two innovative companies are bringing together their technological DNA.” What could this mean in practice? For example, the Hungarian plant of the Korean battery manufacturer is located just over 100 kilometers from the Mercedes-Benz factory in Kecskemét, meaning that all the conditions are in place for Hungary to play a central role in this cooperation in the future.

This is not an isolated case, similar integrations are already underway, such as BMW’s Debrecen-based EV production, supported by nearby battery manufacturing.

These developments highlight Hungary’s growing role as a key meeting point for global automotive and battery industry players, providing a competitive edge within Europe.

Another strategic advantage is that Hungary is home to players in the electromobility ecosystem that occupy leading positions in the rapid advancement of the technology. The pace of development is well illustrated by the fact that battery range has doubled in just a few years, and there is currently no end in sight to this process. Robin Zeng, the founder of CATL, recently announced at a press conference that the company had developed a battery capable of providing a range of 1,500 kilometers, far surpassing the previous record of 1,000 kilometers.

Overall, the Samsung SDI–Mercedes-Benz partnership signals more than a single business deal, as it also validates Hungary's long-term economic development strategy, which is built on industrial ecosystem development and international connectivity, positioning the country as a key beneficiary of the electric transition in the years ahead.