BYD is expanding globally and will establish a new plant for electric and hybrid vehicles in Turkey. This move will significantly improve its access to the European Union market by allowing it to bypass recent tariffs imposed on Chinese-made electric vehicles.
BYD plans to invest nearly $1 billion in a factory expected to be located in Turkey's Manisa province. The plant will have the capacity to manufacture 150,000 vehicles annually, with production set to begin by the end of 2026. The factory will employ approximately 5,000 people.
Following a recent investigation by the European Commission, BYD will face a 27.5% tariff on electric vehicles manufactured in China and sold in Europe. Additionally, Turkey has recently imposed a 40% extra tariff on all Chinese vehicles to protect its automotive industry.
Fortunately for BYD, Turkey is part of the EU customs union, meaning vehicles manufactured there can be exported to Europe without additional tariffs. The deal was announced on Monday during an event hosted by Turkish President Recep Tayyip Erdoğan in Istanbul. It remains unclear what proportion of vehicles produced at the factory will be electric versus hybrid, but this is likely to depend on consumer demand.
BYD stated in a press release that due to Turkey's unique advantages, such as its developed technology ecosystem, strong supplier base, exceptional location, and skilled workforce, its investment in the new production facility will enhance local production capabilities and improve logistics efficiency.
Last week, President Erdoğan informed Chinese leader Xi Jinping that the 40% tariff will be waived for brands that invest in Turkish production. Over 1.4 million vehicles were produced in Turkey last year, nearly 70% of which were passenger vehicles from brands including Hyundai, Toyota, Renault, and Ford. Interestingly, no foreign car manufacturer has established a new car factory in Turkey since Honda opened one there in 1997.
