Chinese electric vehicle giant BYD is getting close to securing a deal with the Turkish government for its proposed domestic production factory, potentially enabling it to further boost its production and deliveries.
BYD expands overseas with planned $1B production hub in Turkey
The government of Turkey is planning to announce an agreement with a deal with China’s BYD to build a new $1 billion electric vehicle factory in the west of the country, Bloomberg reports, citing officials.
According to unnamed government officials, BYD plans to erect its proposed factory in Manisa province.
Turkish President Recep Tayyip Erdogan is reportedly set to declare the agreement on Monday during a ceremony in the said province.
Potential benefits
BYD’s strategy to expand its electric vehicle production to Turkey can help boost its market presence in Europe amid intensifying trade tensions.
The project could aid BYD’s sales and operation in the European Union, considering that Turkey currently has a customs-union deal with the bloc.
Notably, the EU pushed through with its announced provisional tariffs on China-made electric vehicles this week. As part of the new policy, BYD will face an additional 17.4% levy on top of the current 10% rate.
In addition, BYD can also tap into the potential of the domestic market. For context, electric vehicles currently account for only 7.5% of overall vehicle sales in Turkey in 2023. This rate can further increase in the coming years, considering that the country has a population of nearly 90 million people.
Turkey withdraws protectionist measures against China
In separate news, the Turkish government announced on Friday its decision to withdraw the protectionist plans it announced on June 8, which involved imposing an extra 40% tariff on all China-made vehicles.
At the time, the government intended to inflict the proposed additional 40% tariff on Chinese vehicle imports with a minimum of $7,000 per unit on July 7, 2024. It cited efforts to boost the market share of local producers and curb the current account deficit.
Fortunately for Chinese players, Turkey walked back these plans to encourage foreign investment. The decision apparently occurred after Turkish President Erdogan and Chinese counterpart Xi Jinping had a dialogue during a meeting of the Shanghai Cooperation Organization in Astana, Kazakhstan, on Thursday.
BYD has been making strides not only on its home turf but also in the global market, even beating Tesla in the fourth quarter of 2023.
BYD’s intensified global expansion demonstrates its commitment to sustain its upward trajectory and potentially surpass Tesla as the world’s top-selling BEV maker in the coming years. In Q2 2024 alone, BYD’s global NEV sales surged more than 40% year-on-year to a record 982,747 units.
