BYD BEAT TESLA. NOW IT'S IN THE DRIVER'S SEAT.

China’s champion electric-vehicle manufacturer is outselling Tesla and Volkswagen in the global EV race—and a spate of new factories could help it dominate markets outside China.

- By Vivienne Walt

DRIVING FORCE BYD's Stella Li (center), poses with China's ambassador to Austria and an Austrian steel executive after signing a deal in Vienna.

How BYD and its globetrotting No. 2, Stella Li, are spending billions and flexing their soft power. DRIVE 100 MILES SOUTH from Hungary's capital, Budapest, and you'll arrive at a vast industrial site where half-constructed factory buildings stretch over more than a square mile of former wheat fields. There, on a searing hot morning outside the town of Szeged, a worker toiling alongside cranes and earthmovers hauls a cracked pot out of the ground, and holds it up in the blistering sun. “This is thousands of years old!” he exclaims, explaining that it probably dates to the Roman Empire, which once ruled these parts.

POWER-HUNGARY BYD's factory in Szeged (left), set to open this year, will eventually produce 300,000 cars a year. Below: Shoppers in a BYD showroom in Budapest.

Now another great power—China—is putting down stakes here in the heart of Europe. By year's end, the first electric vehicles will roll out of a factory on this site, courtesy of Chinese EV maker BYD Auto—the biggest seller of battery-powered cars in the world, and increasingly the one legacy automakers most fear.