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BYD closes $1 billion deal to build electric vehicle factory in Türkiye
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BYD has struck a $1 billion deal to build an electric vehicle factory in Turkey as China’s biggest carmaker looks to boost its European production and continue its overseas expansion.
The plant will be capable of producing 150,000 vehicles a year, the Turkish government said on Monday. It is expected to start production in late 2026 and create about 5,000 jobs.
The pact comes with the support of Warren Buffett BYDThe world’s second-largest electric vehicle maker after Tesla Inc. is seeking to tap the large EU market at a time when Brussels is cracking down on imported cars from China. BYD is also building a factory in Hungary that will start production next year and is considering a second plant there.
Europe is finalizing higher tariffs on Chinese-made electric vehicles to protect local automakers. BYD will face a total tariff of 27.4 percent on EVs imported from China. Ankara has also taken steps to defend domestic automakers, recently imposing an additional 40 percent tariff on all Chinese vehicle imports.
Peru Turkey has a large automotive industry, with foreign groups including Hyundai, Toyota, Renault and Ford operating in the country, often through joint ventures. Carmakers produced about 1.5 million vehicles in Turkey last year, according to the Turkish Automotive Manufacturers Association. The country’s main export market is the EU.
Turkey is part of the EU Customs Union, meaning vehicles can be exported to the bloc without additional duties.
Analysts at UBS said local production in Europe was always a “possible consequence” of EU tariffs. “BYD is already investing in a plant in Hungary for this reason,” they said, adding that Chinese cars produced in eastern Europe still have a cost advantage of about 25 percent over cars made by their big European rivals.
Mehmet Fatih Kacır, Turkey’s industry minister, said Monday that the deal with BYD was a sign of the country’s “potential to be not only a hub for international investment but also a center for innovation and advanced green technology.” Turkish President Recep Tayyip Erdoğan and BYD founder Wang Chuanfu attended a signing ceremony unveiling the deal in Istanbul on Monday, according to Turkish state media.
Kacır added that Turkey was in “intense talks” with other carmakers in Europe and Asia about investment, as Ankara seeks to attract foreign capital to give impetus to sweeping economic reforms.
BYD did not respond to requests for comment on the deal or the structure of its investment. The new plant would be capable of making electric and hybrid vehicles, and would include a research and development center, Turkey said.
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Analysts pointed to the investment as evidence that Chinese automakers are seeking to adapt their strategies to avoid protectionist measures.
In a sign of Turkey’s EV ambitions, Erdoğan last September asked Elon Musk to build a Tesla factory in Turkey. The country is also developing its own EV through a state-backed project.
BYD’s chief executive in Europe told the FT’s Future of the Car Summit in May that the company was looking to increase local production in its target markets: “Shipping cars from China to Europe is not going to be a long-term thing. The long-term thing is to produce locally,” said Michael Shu.
Additional reporting by Andy Bounds in Brussels