Samsung SDI will building a battery plant in Hungary to supply plug-in electrified vehicles.

The company’s Samsung’s battery division will be investing about 400 billion won ($358 million) to tap into the European PEV market after its presence China has been disappointing, according to Automotive News.

Samsung SDI said in a statement that the proposed factory near Budapest would start production during the second half of 2018. The Samsung SDI plant will be capable of producing 50,000 PEV batteries annually.

The new plant will “help us save logistics costs and quickly cope with demand from customers, as European companies have manufacturing bases around Hungary,” Samsung SDI said in a statement.

SEE ALSO: LG Chem May Be Opening a Lithium Battery Plant in Poland

Samsung SDI last year started production at its factory in China, but the company said that subsidy regulations have hampered its sales.

Another South Korean battery maker, LG Chem, is planning to open a plant in Europe to meet rising demand. LG Chem is expected to open a PEV battery plant in Poland, a person familiar with the matter told Reuters in April.

Samsung SDI produces batteries for the BMW i3 in South Korea. It was one of several battery makers that submitted bids to Tesla Motors to supply the upcoming Model 3, but in June CEO Elon Musk tweeted that Tesla will be staying with Panasonic.

Automotive News