Chinese electric vehicle manufacturer BYD has reached an agreement with the Turkish government to construct a $1 billion production facility in Turkey. This new BYD Plant is designed to produce 150,000 vehicles annually, a development that was reported by Reuters and confirmed by Turkey’s Industry and Technology Minister, Mehmet Fatih Kacir, on Monday.
Minister Kacir shared photos on social media platform X, depicting Turkish President Tayyip Erdogan alongside BYD Chief Executive Wang Chuanfu at the deal-signing ceremony for the BYD Plant. He explained that the BYD Plant will include an electric and rechargeable hybrid car production facility and an R&D center for mobility technologies, with the total investment estimated at approximately $1 billion. The facility is expected to begin production by the end of 2026 and will create up to 5,000 jobs, which will significantly boost the local economy and create numerous opportunities for skilled workers.
This announcement follows the European Union’s recent increase in tariffs on Chinese electric vehicles to protect its own industry. Kacir noted that the BYD Plant could facilitate investor access to European markets, given Turkey’s customs union with the EU. He highlighted that this agreement resulted from ongoing discussions with Chinese officials following a visit to China in December 2023. This strategic move is seen as a way to strengthen economic ties between Turkey and China while positioning Turkey as a key player in the global electric vehicle market.
Earlier, China’s state-backed Securities Times reported that BYD had agreed to build a factory for core parts of new energy vehicles to support the capacity of its Shenzhen factory. However, Turkey was not specifically mentioned in these initial reports. This new development indicates BYD’s broader strategy to diversify its production capabilities and mitigate risks associated with trade tariffs and geopolitical tensions.
In related developments, a deputy chairman of Turkey’s ruling AK Party informed Reuters that Chinese carmaker Guangzhou Automobile Group is in talks with Turkish EV manufacturer TOGG about a potential joint production venture. This indicates a broader strategy to bolster Turkey’s position in the electric vehicle market. The collaboration between Guangzhou Automobile Group and TOGG could further enhance Turkey’s capacity to produce high-quality electric vehicles, leveraging the expertise and resources of both companies.
The establishment of the BYD Plant in Turkey is expected to significantly enhance BYD’s access to the European Union, allowing it to circumvent recent import tariffs on Chinese-made EVs. Following a European Commission investigation, BYD will face a 27.5% tariff on EVs built in China and sold in Europe. Additionally, Turkey has recently imposed an extra 40% tariff on all Chinese vehicles to protect its own car industry and support its domestic EV manufacturer, TOGG. However, since Turkey is part of the EU’s Customs Union, vehicles built at the BYD Plant in Turkey can be exported to Europe without incurring these additional tariffs, providing a strategic advantage for BYD.
The new BYD Plant represents a significant investment in Turkey’s automotive sector and highlights the growing importance of electric vehicles in the global market. By establishing this facility, BYD aims to capitalize on the increasing demand for sustainable transportation solutions while also contributing to the development of Turkey’s technological and industrial capabilities. This initiative is expected to pave the way for more collaborations and investments in Turkey’s electric vehicle industry, positioning the country as a regional hub for innovation and production in the field of sustainable mobility.
Furthermore, the BYD Plant is likely to have a positive impact on the environment by promoting the use of electric vehicles, which produce fewer emissions compared to traditional gasoline-powered cars. This aligns with global efforts to combat climate change and reduce the carbon footprint of the transportation sector. As a result, the establishment of the BYD Plant in Turkey not only benefits the local economy but also contributes to broader environmental and sustainability goals.
Overall, the agreement to build the BYD Plant in Turkey marks a significant milestone in the country’s journey towards becoming a leader in the electric vehicle industry. With substantial investment, job creation, and the potential for enhanced market access, this development is set to have far-reaching implications for Turkey’s economic growth and technological advancement.
