An investigation has been opened into Hungary’s €108 million ($120 million) pledge to help fund Samsung SDI’s battery cell production expansion plans in Göd (Hungary), the European Commission announced on 14 October.
The Commission is set to investigate whether the financial support was necessary for Samsung to trigger the expansion plans at its existing plant in Göd, which was completed in 2017.
Samsung is investing around €1.2 billion ($1.3 billion) to expand production of lithium-ion cells and battery packs for electric vehicles.
At this stage, the Commission has concerns whether the planned aid complies with all relevant criteria of the Regional Aid Guidelines. These are:
- Will the funding have an “incentive effect” with the Commission looking at whether Samsung’s decision to invest in the expansion plans was made as a direct result of the funding.
- The Commission also has doubts in relation to the public support’s contribution to regional development and on its appropriateness and proportionality.
- The Commission cannot exclude at this stage that the public support may lead to the relocation of jobs from other EU Member States to Hungary.
Commissioner Margrethe Vestager, in charge of competition policy at the Commission, said: “Public investment is important to foster economic growth in disadvantaged regions in Europe. But public support should only be given if it’s necessary to trigger private investment in the disadvantaged region concerned.
“Otherwise, it only gives the beneficiary an unfair advantage over its competitors, at the expense of taxpayers.
“The Commission will carefully investigate whether Hungary’s planned support is really necessary for Samsung SDI to invest in Göd, is kept to the minimum necessary and does not distort competition or harm cohesion in the EU.”
In 2018, Hungary notified the Commission of its plans to grant money toward the project.
The opening of an in-depth investigation provides Hungary, and interested third parties, with an opportunity to comment on the measure. It does not prejudge in any way the outcome of the investigation.