I Own BYD. Chongqing's 11-Day Train Changed What I Watch.

I had a view on BYD's European manufacturing expansion. I had not formed one on how its parts get there — until November, when Chongqing started running fixed-schedule trains to Hungary.

China-Europe Railway Express train, Chongqing. November 2025. Photo: iChongqing.

I went to Chongqing in November to understand a city where three of my positions converge. I wrote about that trip in City Mechanics: What Chongqing Taught Me About My Portfolio. After it published, several readers wrote in about one detail I had folded into a single paragraph: the freight train from Chongqing to Budapest, opened the week I was there.

This piece is the answer. It is also, honestly, an example of the kind of detail I like to understand about a business before I invest. Not trains specifically, but how a company actually operates. That kind of understanding is what lets me tell fact from fiction, and hold through volatility. I own BYD. BYD’s first European assembly plant — Szeged, Hungary, EUR 4 billion, 300,000 vehicles a year at full scale — sits 160 kilometres from where those trains stop. The corridor opened on 30 November 2025: biweekly, eleven days, fixed timetable. Six months old.

When I formed my view on BYD’s European build-out, this line did not exist. There is now a logistics input sitting next to labour, tariffs, and local content that was not there before.

The Budapest Line

Chongqing has been running freight trains to Europe since 2011 — the inaugural China-Europe Railway Express train left Tuanjie Village for Duisburg on 19 March that year. Most of those trains run on demand, with variable transit times. The Duisburg route went onto a fully fixed bilateral timetable some years back, China’s first. Budapest, opened on 30 November 2025, is the second. Biweekly, eleven days, run by Yuxinou (Chongqing) Logistics. Chongqing rail officials frame the line as a gateway to Slovakia, Austria, and Serbia, not only Hungary.

A reality check before going further. China shipped 108 TEUs to Hungary by rail in all of 2025. Not 108,000. 108. The corridor exists on paper and on a biweekly timetable; the volume does not yet exist at all. What follows is the work I did to figure out whether the corridor matters. If the volume gap closes, it adds a logistics input I had missed. If it does not, my view on BYD before discovering the train still holds.

Why Budapest specifically. BYD’s EUR 4 billion Szeged plant is in trial production since January 2026, with mass production targeted for Q2 2026. CATL’s 40 GWh Debrecen gigafactory sits 250 kilometres from the rail terminal, with cells already shipping. On the Chinese side, Chongqing’s automotive parts cluster — over 1,000 suppliers, with BYD’s own Fudi Blade Battery factory at its centre — is the natural first-tier supplier base for Szeged. I walked the Chongqing supplier cluster in November. The geometry is unusually clean: one cluster, one plant, one fixed-timetable corridor between them.

As one enterprise representative told state media outlet Xinhua:

“Goods destined for Central and Eastern Europe previously required multiple transshipments or sea freight, with large lead-time variability. Now with fixed-schedule trains, we can even plan production schedules and inventory management by the timetable — supply chain resilience is greatly enhanced.”

Eleven days versus thirty-plus by sea. For just-in-time automotive supply chains, where carrying-cost savings on inventory partially offset the freight premium, the lead-time gap is what makes the corridor commercially relevant. Not the price. The timetable.

What It Costs

I built out the door-to-door freight economics myself, using current forwarder quotes and the Drewry container index. The short version: rail is expensive. The longer version follows. Rail Chongqing-Budapest runs roughly US$9,600 per forty-foot container, end to end. Sea, routed via the Yangtze to a Northern European port and trucked inland to Hungary, comes in at roughly US$6,425. Rail is around 49% above sea on a like-for-like basis. These are post-subsidy quotes — central per-container support for China-Europe rail wound down through 2023, and what’s left in Chongqing is land, tax, and infrastructure support to operators, not cash per container.

The premium does not vanish on a spreadsheet, but it does not fully reverse there either. Three weeks of vehicle parts sitting on water is working capital tied up; carrying-cost arithmetic recovers something like a tenth of the rail premium, not all of it. The rest is paid for something else: corridor geometry. A fixed-timetable train between one supplier cluster and one assembly plant lets a 300,000-vehicle plant schedule production against the corridor, not the swell on the Indian Ocean. Whether that optionality is worth a forty-plus-percent net premium is the live question, and the answer probably depends on which parts. Heavy, low-value-density components keep going by sea. Time-sensitive battery and powertrain content moves by rail. That is the split I would expect to see, and the one that will show up in volume data over the next eighteen months if the corridor is going to matter.

What I’m Forecasting

Biweekly is not a supply chain. It is a gesture.

If you are scheduling production for a plant targeting 300,000 vehicles a year, two trains a month does not feed an assembly line. The Chongqing-Duisburg corridor took three years and a month from inaugural train to weekly cadence — March 2011 to April 2014. Budapest opened in November 2025. My base case is weekly cadence somewhere in 2028 to 2030, once Szeged is past trial production and the corridor is pulling volume from Chengdu and Chongqing together.

The math is bottom-up. Take Szeged at half nameplate — 150,000 vehicles — as a deliberately conservative short-term steady state. Per vehicle, roughly 600 kg of China-sourced battery and powertrain content: about 450 kg for a Blade Battery pack, 80 kg for an e-axle, 70 kg for motors and ancillaries. Across 150,000 vehicles, divided by about 13 tonnes per dense-cargo TEU, plus a 20% packaging and consumables buffer. That gets to roughly 8,300 TEUs a year of inbound Chinese content into Szeged.

The split by Chinese origin is the part I am least sure of. BYD has not published a supplier-by-origin breakdown. My working assumption is that around 35% of Szeged’s inbound Chinese content originates in Chongqing — the Fudi Blade Battery factory, the adjacent powertrain capacity, and the broader 1,000-supplier cluster across Chongqing and Chengdu make Chongqing the obvious anchor. That puts roughly 2,900 TEUs from Chongqing alone at the 150,000-vehicle steady state. The exact share is illustrative; the load-bearing claim is that Chongqing-rooted suppliers carry the bulk. Drop the share to 15% and Chongqing still carries roughly 1,250 TEUs at steady state — an order of magnitude above all of Hungary in 2025; push it to 55% and you get 4,600. The load-bearing claim survives at either end.

All of Hungary took 108 forty-foot containers by rail from China in 2025. At the BYD plant at Szeged steady state, Chongqing alone could send around 2,900 a year — roughly twenty-five times the entire 2025 baseline, from one inland Chinese city. The corridor is six months old. The plant is not yet in mass production. That is the shape worth watching.

What Would Prove Me Wrong

Two ways the corridor stops mattering.

The 35% Chongqing-origin share assumes Szeged sources predominantly from Chongqing-rooted suppliers. If the Chinese content actually flows from Shenzhen, Xi’an, or BYD’s other hubs, the rail link is largely irrelevant to how I read BYD’s European build-out — relevant to someone else’s read, not mine. A supplier-by-origin disclosure from BYD, or freight-manifest sampling at the Budapest terminal, would close it.

The other way is faster than I expect. EU local-content rules and the Brussels push for European battery and component sourcing could pull Szeged’s parts demand into Hungary, Poland, and Czechia faster than the corridor scales. In that scenario the 49% rail premium loses its carrying-cost offset, because the comparison stops being rail-from-Chongqing versus sea-from-Chongqing and becomes rail-from-Chongqing versus a 400-kilometre truck from a Polish supplier. The logistics input I added washes out. The view I had on BYD’s European build-out before discovering the train still holds.

What This Changes for BYD

Not the thesis. I did not buy BYD because of trains, and one biweekly freight line does not move the underwriting on a company I have written about at length elsewhere.

What it changes is one input. How BYD’s European build-out actually runs now includes a Chinese rail-logistics line that did not exist before — small today, potentially material at Szeged steady state, contingent on the volume actually showing up. That is a thing to watch, not a thing to act on.

What it changes more durably is how I read China’s manufacturing reach into Europe. A fixed-timetable corridor between an inland Chinese supplier cluster and a Central European assembly plant is what the policy documents have been describing for years. Now there is a train. Whether it carries 108 containers a year or 8,000, whether the volume comes from BYD or someone else, the geometry has shifted. China is no longer manufacturing at the coast and shipping out. It is manufacturing inland and railing in.

This is the kind of work I left institutional finance to do, and the reason I publish what I learn. The longer story: Why Cohong Lane? A CFO’s Bet on Independent Investing.

---

As of the date of publication, I hold positions in BYD Company (HKEX: 1211) and Contemporary Amperex Technology (HKEX: 3750). Positions may change after publication without notice. Cohong Lane is a periodical publication made generally available to the public; this is disclosure of my positions, not a recommendation to buy, sell, or hold any securities. Full disclaimer · About Philip.