China makes a $1 billion deal with Turkey to build EVs in Turkey circumventing EU tariffs imposed on Chinese electric cars.
The Chinese electric vehicle (EV) company BYD recently signed a historic $1 billion agreement with Turkey’s Industry and Technology Ministry to establish a manufacturing plant in the country. This deal is significant for Turkey’s automotive sector and economy, providing much-needed employment opportunities and establishing a strategic connection to Europe.
Under the terms of the agreement, BYD will construct a manufacturing plant and an electric vehicle production facility capable of producing 150,000 vehicles annually. Additionally, an R&D center focusing on sustainable mobility technologies will be established in Turkey.
Given the geopolitical landscape and recent events, Turkey’s alignment with China, Russia, and Iran in light of the Ukraine-Russia conflict may impact trade relations with Europe. Establishing car plants in Turkey enables easier access to export markets in neighboring Asian countries.
The new plant is projected to create up to 5,000 jobs and is scheduled to commence production by the end of 2026. BYD emphasized Turkey’s technological ecosystem, supplier network, strategic location, and skilled workforce as key factors in their investment decision.
With a focus on meeting the growing demand for electric vehicles in Europe, BYD aims to reach consumers in the region through local production in Turkey. Despite not being a member of the EU, Turkey is a significant automobile manufacturer in Europe, exporting over $35 billion worth of vehicles annually.
The new plant will be located in the western Manisa province, providing an advantageous position for manufacturing and distribution. Following the announcement of the deal, the EU implemented increased tariffs on Chinese EVs, prompting the need for alternative production strategies.
By collaborating with Turkey, China aims to circumvent high tariffs on Chinese-made cars and effectively enter the European market. This partnership builds on Turkey’s longstanding history in the automotive industry, aligning with established manufacturers like Fiat, Renault, Ford, Toyota, and Hyundai.
