Electric dreams, hard realities

László Horváth felt rather sick that evening, but decided to go to work anyway. If the 45-year-old assembly line operator misses his night shift at the battery gigafactory in Hungary, he will lose this month’s’ attendance bonus as well, a crucial 20 per cent of his monthly income.

At 2 am, László struggles to stay awake surrounded by the whirring factory machinery. The burgeoning Hungarian battery industry promised a bright future for workers like László, offering jobs and decent wages, and helping to power the electric vehicle revolution in Europe. But this ‘hum of progress’ is now regularly drowned out by fatigue and worries.

László’s monthly net base wage of EUR 600 does not cover his family’s needs, forcing him to snatch extra shifts whenever possible. The rotating schedule of 12-hour shifts, alternating between day and night, leaves him constantly out of sync, interfering with sleep patterns and family responsibilities.

He coughs, ignoring the ache in his chest, remembering last month’s news report about his employer being fined for exposing workers to harmful chemicals. Did he also inhale some of these substances?

Across the factory floor, Ukrainian and Filipino workers assemble battery cell packages for BMW and Volkswagen, their faces etched with similar strains as László’s. The language barrier makes it difficult to share stories, express frustrations, or even have a simple chat.

The future may be electric, but for László and his fellow workers, the present is fraught with distress and uncertainty.


Good or bad jobs?

László’s story is based on interviews with workers and trade unionists in Hungary and resembles that of thousands of workers in the country’s nascent battery industry. It raises serious concerns about the corporate-led green transition in Europe that is based on exploitative working conditions to increase profits-at-all-costs despite promises of creating good jobs.

The Hungarian government and the European Commission are giving large subsidies and tax breaks to the battery industry to promote Europe’s energy and transport shift. This sector is among six in which the EU aims for self-sufficiency.

To justify spending substantial amounts of taxpayers’ money, the European Green Deal policy stresses the need for “well-paid quality jobs”, highlighting that a “green transition must be people-centred”.¹

On 12 July 2023, the EU enacted its Batteries Regulation(opens in new window) , marking the strategic importance of batteries and acknowledging the social and environmental risks that come with their production. Starting in August 2025, battery manufacturers and importers placing batteries on the EU market must establish a due diligence management system to identify, prevent, and address social and environmental risks in their supply chain. Such due diligence obligations cover human rights and labour rights, including occupational health and safety, forced labour, and trade union freedoms.

Battery manufacturing will employ an estimated one million people worldwide by 2030, including up to 300,000 people in Europe.² The question is whether these jobs will be decent. Will they be well paid and safe, or instead impose low wages, long hours, and unsafe conditions on unorganised workers without collective bargaining rights?

Unfortunately, our research points towards the latter scenario, with Hungary as a dire example of how badly the transport transition is unfolding for workers. Rather than offering quality employment opportunities, the industry relies on low wages, poor working conditions, and exploitation.

Hungary’s key role in battery production

“What has been common in liberal, socialist and ultra-conservative governments is their eagerness to please multinational companies, most notably German carmakers, to invest in the country.”⁵

China will continue to be the largest producer of EV batteries globally, but the US and Europe are keen to ramp up their production capacity (see The big battery boom(opens in new window) ). Hungary has become a pivotal hub for battery production in Europe, on track to become the continent’s second-largest producer by 2030, trailing only Germany.

Hungary has a well-established car industry that employs over 150,000 people.⁶ The sector is closely integrated with German car manufacturers and their suppliers.⁷

To serve the car industry’s needs in the transport transition, Hungary has witnessed an influx of companies along the battery value chain, from the manufacturing and assembly of battery cells to the production of components such as cathodes and electrolytes. Additionally, firms specialised in battery recycling have flocked to Hungary.

Altogether, the battery value chain in Hungary will employ over 27,000 workers by 2030.

Hungary’s embrace of Chinese investments and the Belt and Road Initiative(opens in new window) has significantly boosted its battery and car industries. The country has strategically positioned itself as a key link between East Asian battery makers and Western European EV manufacturers.

Battery manufacturers in Hungary have signed strategic partnerships and multi-year supply contracts with EV manufacturers. For example, CATL, the world’s leading battery producer, owned and headquartered in China and operating in Hungary, has committed to achieve dedicated production capacity of 20 GWh/year supplying batteries to BMW, Mercedes-Benz, and Stellantis.

In December 2023, leading Chinese EV company BYD announced that it will build its first European electric car manufacturing plant in Szeged, Hungary, with batteries shipped from China.¹⁸

Hungary stands out with its business-friendly policies, including its corporate tax rate of 9 per cent, well below the average of 21.5 per cent among other European OECD countries.¹⁹

Due to tax breaks and incentives, companies based in Hungary pay even less. For example, the effective tax rate of Samsung SDI’s Hungarian subsidiary was 8.4 per cent in 2022. Electrolyte producer Soulbrain’s effective tax rate in 2022 was as low as 1.5 per cent because of a development tax credit it received from the Hungarian state.²⁰ These disparities show that Hungary’s economy unfairly favours large international companies over local businesses and people.

Adding to this imbalance, the Hungarian government heavily supports the battery and EV industry, with subsidies projected to reach EUR 2.9 billion by the end of 2025.²¹ For example, SK On has already received EUR 312 million in cash grants to build two battery gigafactories.²²

This is not the complete picture. On top of these subsidies, the Hungarian government spends public money on infrastructural developments like industrial parks, railroads, and water and electricity systems to serve the industry.

Hungary’s social downgrading of labour protection

Since the 1990s, Hungary has sought to attract foreign investment by reforming labour laws and making working conditions more flexible. As a result of the legislative changes, Hungarian law provides fewer protections for workers compared to many European counterparts.²³ One particularly controversial amendment came into effect in 2019. Publicly referred to as the ‘Slave Law’, it sparked widespread public outrage and a series of street protests.²⁴

Central to this reform was the extension of overtime provisions in favour of employer demands and harshening of the controversial ‘time-banking’ system. Under the new legislation, workers can accumulate as many as 400 overtime hours per year, a significant leap from the previous limit of 250.²⁵ The regulatory changes enabled companies to enforce more overtime during high-demand periods while leaving workers with lower wages when they needed less labour.²⁶

The Hungarian trade unions claim the law was passed without properly consulting them.²⁷

Against this backdrop, Hungary is embracing a low-road industrialisation approach often dubbed ‘Foxconnisation’.²⁸ Low wages, long work weeks, hazardous working conditions, reliance on migrant labour, and opposition to unionisation efforts characterise the approach.

Poverty base wages

“If I work hard and take overtime, I can earn HUF 400,000 net. But if I miss two shifts [a month], it is 100,000 less.”

Assembly-line worker at a Hungarian gigafactory.³¹

Wages in Hungarian manufacturing are notably low. In 2022, Hungary had the third lowest average hourly wage among EU member states at EUR 9.1, while the EU’s overall economy averaged EUR 22.9.³²

The wage structure in battery factories is problematic for workers. Job advertisements for battery manufacturing positions promise workers a net monthly income of EUR 1,000, but the base salary is often just EUR 600.³³ This is below the EUR 650 a single-person household needs to cover basic needs.³⁴

The difference between the base wage and take-home wage is rooted in a complex, bonus-driven system where a significant portion of employees’ wages is variable. The three most common types of bonuses are:

Shift supplement bonus: Much of the battery industry operates 24 hours a day, with assembly-line workers required to work 12-hour shifts. Hungarian labour laws oblige employers to pay a 30 per cent bonus for night hours between 6 pm and 6 am, boosting employees’ income.³⁵ However, night work comes at a cost in terms of health, safety, and family life.

Attendance bonus: Awarded to employees if they don’t miss a shift, attendance bonuses may motivate staff to go to work even when ill. This approach can disproportionately impact caregivers, particularly women with childcare responsibilities, who may need to take days off to care for ill children, consequently missing out on these bonuses.

Production bonus: This bonus rewards workers based on their productivity or ability to surpass performance benchmarks. However, the lack of transparency surrounding production bonuses makes it difficult for employees to understand or predict their additional earnings. One worker reported: “The bonus system is difficult to see through, it is designed to pay as much as they want.”³⁶

Bonuses and overtime shifts have become crucial for workers to obtain a living income in Hungary’s automotive sector, as base salaries alone fall short.³⁷ For assembly-line workers, the opportunity to work overtime during scheduled days off is not just an option but vital to obtain sufficient income. However, fluctuating demand for production occasionally restricts this option, compelling many to seek secondary employment to supplement their income.

Against the backdrop of these personal strategies to deal with financial problems, Hungary’s controversial time-banking scheme allows for flexible working weeks that can vary in hours without overtime compensation,³⁸ provided the weekly average over a longer period does not surpass 40 hours.³⁹ This system grants employers flexibility but undermines stability for employees at the whim of scheduling decisions. Further, the blurring of lines between regular and compensated versus overtime work hours under time banking confuses workers, undermining their ability to understand and accurately predict their earnings.

Time banking can potentially tie workers to their workplaces, as one trade unionist argues:

“It is possible to accumulate ‘negative hours’; for example, if there is a planned or unplanned stoppage of production. In this case, the individual owes this time to their employer: if they want to leave, they must either pay it back first, work it off, or wait until the time frame expires.”

Health and safety risks

“We do not see what the danger is, but the danger is always there.”

Hungarian gigafactory worker and volunteer plant firefighter.⁴⁰

The substances used in battery cathodes, anodes, and electrolytes pose serious safety and health risks, especially in workplaces with inadequate safety measures. To reduce the risks of occupational exposure, safety and environmental regulations should mandate strict protocols for the handling, storage, and disposal of these substances. This includes using personal protective equipment, proper ventilation systems, regular health monitoring, and empowering workers who have received safety training, enabling them to supervise safety conditions.

The following three cases demonstrate that Hungary’s battery industry exposes workers to significant health and safety hazards. Such risks are compounded because there have so far been few studies of occupational health and safety risks associated with nascent EV battery manufacturing.


Safety violations


Between January 2019 and June 2023, Samsung SDI received 57 penalties from the Hungarian authorities for violating fire safety and hazardous material regulations and putting workers’ safety at risk.⁴¹ A 2021 report by the country’s disaster management authority, which is tasked with monitoring industrial workplace hazards, revealed that the assembly unit’s fire safety and alarm systems were non-compliant during inspections from 2018 to 2021, putting over 1,000 workers at risk.⁴²

In 2019, the disaster management authority discovered pools of toxic sludge and over 100 tonnes of hazardous materials, including nickel manganese cobalt (NMC) and nickel cobalt aluminium oxide (NCA), stored without the necessary permits, compounding the company’s safety lapses.⁴³ The substances pose alarming exposure risks: inhaling NMC can be carcinogenic and fatal, while NCA exposure can cause severe burns and eye damage.

An investigation by the labour inspectorate revealed that the factory’s ventilation system was inadequate for filtering small dust particles effectively. The investigation also found that workers were not informed about the carcinogenic nature of the materials they were handling, and the company failed to maintain records of workers exposed to hazardous substances. Personal protective equipment was stored improperly, and there was no evidence that workers received the mandatory protective suits. The company received the maximum fine of HUF 10 million (EUR 26,000) for these infractions in 2022.⁴⁴

This is just one of many fines Samsung SDI received in 2022, totalling EUR 371,000. This amount was a pittance for the company, however, representing just 0.5 per cent of its after-tax profit of EUR 77 million that year. Moreover, this sum starkly contrasts with the EUR 89.6 million in subsidies the company received from the Hungarian government to expand the factory, underscoring the limited effect of these fines on the company’s finances.⁴⁵

Exposure to toxic materials

The situation at SK On’s Komárom facility further illustrates the industry-wide issue of exposure to toxic and carcinogenic materials. Notable incidents include the hospitalisation of three workers in 2021 following exposure to hydrogen fluoride due to inadequate protective gear, and multiple workers suffering from symptoms like shortness of breath, vomiting, and dizziness after being exposed to hydrogen cyanide and ammonia in 2022.⁴⁶

Additionally, around 50 workers were exposed to elevated levels of nickel, a known carcinogen, with some showing nickel levels three times higher than the EU safety thresholds. Exposure to nickel can diminish fertility and may lead to developmental problems in children. Despite the employer’s attempts to persuade workers and the local trade union to accept higher nickel concentration thresholds, the union staunchly opposed this, advocating stricter adherence to safety regulations.⁴⁷

Grinder explosion

SungEel Hitech is a South Korean-owned battery recycling firm, whose operations in Hungary have also been marred by safety violations and fines.⁴⁸ In July 2022, two explosions injured three workers and a firefighter at its recycling facility in Bátonyterenye. The facility was subsequently shut down for several months in 2023 by the Hungarian authorities following repeated operational breaches, including improper waste storage and the emission of noxious odours, leading to health issues even among state inspectors.

The company then reported that it had complied with the safety measures the authorities demanded and reobtained the operating licence for the factory.⁴⁹ The company had received a EUR 7.7 million grant from the Hungarian state.

A SungEel Hitech facility in Szigetszentmiklós also faced fines for unsafe conditions, including exposure to carcinogenic substances without proper protection. In early 2019, the labour inspectorate found that “the requirements for safe and healthy working conditions were not met, and the employer seriously and directly endangered the health and safety of 12 of its employees”.

In 2023, a grinder explosion at the same plant resulted in two worker fatalities. Commenting on this tragic accident, a trade union official stated:

“There should be much stricter inspections and a system of control, feedback, and penalties. I don’t believe that a fine of HUF 10 million [approximately EUR 26,000] at a workplace where two people have lost their lives serves as any deterrent.”
⁵⁰

Health and safety incidents in other countries

Health and safety incidents in the electric battery industry are not exclusive to Hungary. Most dramatically, a fire at a lithium battery plant in Hwaseong, South Korea, killed 23 migrant workers, highlighting severe safety and labour issues. Most victims were ethnic Koreans from China, illustrating the perilous conditions migrant labourers face in South Korea.⁵¹

In Germany, there have been reports of a high number of work-related accidents at the Tesla Berlin gigafactory, including burns, acid exposure, and amputations.⁵² Tesla rejected the claims, but IG Metall, Germany’s largest trade union, stated that many accidents at the Tesla gigafactory occurred due to inadequate safety provisions. An unusually high number of workers joined the union as a result.⁵³ Workers interviewed by Reuters said: “[P]ressure for speed was too high, with some reporting a high incidence of accidents and issues with receiving overtime pay.”⁵⁴

Restricted rights for migrant workers

“Filipino workers often don’t know what to expect, for example arriving in slippers in March.”

Hungarian trade union official.⁵⁵

The Hungarian battery industry faces a critical labour shortage, exacerbated by extensive flexibilisation, low wages, and substandard working conditions. Rather than address these core issues through improved conditions and social advancements, the sector has increasingly and selectively recruited foreign workers under captive conditions such as fixed terms and single-employer contracts via government-approved agencies. As a result, these workers are effectively unable to seek employment with other employers.

The introduction of a new immigration law on 1 January 2024 signifies a key shift in Hungary’s approach to addressing labour shortages in industries, such as battery manufacturing, the government considers strategic. This legislation fast-tracks the process of hiring migrant workers in specific occupations, aiming to fill vacancies more swiftly.⁵⁶ As a result, a significant proportion of the battery supply chain workforce now comprises foreign employees, with management positions often staffed by expatriates from the company headquarters in China or South Korea.

Companies like Samsung SDI have favoured hiring workers under such terms from countries outside the EU, such as Ukraine and the Philippines, through agencies. SK On’s factory in Komárom has reported that 35 per cent of its workforce includes ethnic Hungarian commuters from Slovakia, highlighting the diverse origins of the sector’s labour force.⁵⁷

Foreign workers, particularly those hired through agencies, are vulnerable in many ways. Work and residence permits tied to their employer, combined with fixed-term contracts, curtail these workers’ freedom to switch jobs. This increases the risk of harassment, exploitation, abuse, and discrimination. Further, guest workers are permitted to reside in Hungary for a maximum of only three years, after which they are ineligible to reapply for residence permits.

This precariousness is compounded by language barriers that not only isolate migrant workers but also pose significant safety risks, especially in environments dealing with hazardous chemicals. This is evident when management and assembly-line workers can’t communicate due to language differences. For example, two companies – one a cell manufacturer and the other a recycling business – have faced several fines due to missing multilingual labels and documents.⁵⁸

As a trade union leader stated: “These factories operate with chemicals, and the requisite skills to handle them might not be available in the home countries.”⁵⁹

Employers exploit the influx of foreign workers to create a secondary labour force in ways that further undermine decent working conditions, compete with native workers, and suppress wages. These foreign workers, often enduring extensive overtime as a necessity rather than a choice, face wage disparities compared to their native Hungarian counterparts. While they are legally entitled to the same wages as Hungarian workers, wage deductions for agencies’ provision of ‘free’ accommodation lead to discrepancies in take-home pay, which can foster competitive tension among workers.

Trade union challenges

“We cannot reach a collective agreement that covers all workers, including agency workers.”


Hungarian trade union official.
⁶⁰

In Hungary, the government’s failure to consult with trade unions and prioritise worker protections obstructs the fundamental rights of labour representation and collective bargaining. Hungary’s low labour rights rating on the 2023 International Trade Union Confederation (ITUC) Global Rights Index reflects this, indicating systematic violations and suppression of workers’ voices by both state and corporate entities.⁶¹ Additionally, official tripartite forums for consultation operate ineffectively, further hindering unions’ ability to advocate successfully.⁶²

The global battery supply chain is largely controlled by corporations with headquarters in China (CATL and BYD) and South Korea (LGES and Samsung SDI), countries known to obstruct unionisation and collective bargaining rights. Labour standards in Chinese battery factories are strongly influenced by the low-wage electronics sector, exemplified by firms such as Foxconn, and worker representation and trade unions are weak.⁶³ South Korea’s Samsung is notorious for its anti-union stance both domestically and internationally,⁶⁴ including reports of obstructing workers’ rights at its factory in Göd, Hungary.⁶⁵

Despite these obstacles, Hungarian unions have begun to establish themselves in EV manufacturing and battery plants like that of SK On, signalling growing awareness of labour rights in the ‘green economy’.

The use of government-approved employment agencies, some of which strongly oppose unions, complicates the situation for workers seeking to organise. Organising agency workers poses a distinctive challenge, primarily stemming from Hungarian legal regulations that prohibit agency employees from affiliating with the same union branch as core factory workers. This rule divides the workforce and undermines workers’ ability to collectively negotiate and advocate their rights effectively. It is challenging for unions to recruit among agency workers in the first place, due to the high turnover rate and language barriers. This is especially the case in companies lacking a strong union presence, such as most battery companies.

The way forward – opportunities for action

The European energy transition, heralded as a green revolution, conceals troubling realities below its electric surface. Our exploration into the burgeoning battery industry, with a focus on Hungary, reveals a harsh juxtaposition of Europe’s efforts towards decarbonisation and the exploitation of workers fuelling this transition.

Hungary quickly recognised the economic potential of the battery supply chain by positioning itself as a prime hub for East Asian companies that play a leading role in this sector. This strategic move was reinforced by Hungary’s advantageous position as a gateway to the EU market, combined with its relatively low production costs.

Despite promises of decent wages and secure employment, the reality is far less rosy. Workers endure gruelling 12-hour shifts, hazardous conditions, and meagre base wages, often struggling to make ends meet. The disparity between advertised and actual wages, coupled with exploitative bonus systems, underscores a broader pattern of labour abuse in the industry. The government’s substantial subsidies and tax incentives creates an industry that systematically undercuts worker welfare.

The Hungarian sector’s reliance on low-cost, precarious labour and dangerous working conditions mars the promise of a green transition. Hungarian labour reforms, including the controversial ‘Slave Law’, exacerbate the situation by reducing worker protections and facilitating exploitative practices. Further, the influx of foreign workers under precarious conditions deepens the exploitation, creating a segmented labour market where native workers and migrants face stark inequalities.

The EU’s Green Deal and Batteries Regulation, while steps towards accountability, fall short of ensuring that the industry’s growth does not come at the expense of workers’ rights and safety. Large subsidies and state aid flow to the battery industry without any labour or environmental conditions attached. A truly sustainable transition must address these labour issues comprehensively (alongside reducing mineral demand(opens in new window) ), ensuring that the drive for green energy does not perpetuate a cycle of exploitation and inequality.

The EU Battery Regulation can be key to responsible battery production, particularly in protecting workers’ health, safety, and trade union rights. To be effective, due diligence should not be limited to sourcing minerals but cover the entire supply chain. Furthermore, car and battery companies should actively engage with workers and their representatives and consult media and civil society reports as part of their due diligence. Companies must take steps to prevent and mitigate risks, such as exposure to harmful chemicals and union busting. While certification schemes can support due diligence, businesses are ultimately responsible for meeting these obligations and must provide remediation if they cause harm.

For László and his co-workers, better regulation at the EU level may be far from what keeps them busy in day-to-day life, but it could mean a transition from precarious to dignified working conditions, and being part of a dream instead of a nightmare.