China’s BYD to Set Up $1 Billion Production Facility in Turkiye

Chinese electric vehicle manufacturer BYD, a.k.a ‘Build Your Dreams’, strengthened its footprint in the European market with a new $1 billion production facility in Turkiye, which will allow the company to sell across the region without paying new import tariffs on electric vehicles produced in China.

The agreement for the new project was signed on July 9 by BYD’s CEO Wang Chuanfu and Turkiye’s Industry and Technology Minister Mehmet Fatih Kacır, which includes establishing a sustainable mobility research and development centre.

The proposed BYD plant will have a production capacity of 150,000 vehicles per year and create up to 5000 direct jobs, and production is expected to begin in late 2026, according to an fDi Intelligence report. 

Although the location of BYD facility has not been finalised, it will be most likely be in Manisa in Western Turkiye, where Volkswagen was supposed to have launch a $1.4 billion manufacturing facility, Burak Daglıoglu, President of the Investment Office of the Presidency of Turkey, said. However, the deal fell through in 2020.  

Daglıoglu said that the Turkish authorities have been engaging with Chinese EV makers since the pandemic and their commitment was the real difference. Among the factors that Chuanfu said, as part of BYD’s decision to choose Turkey, were it was a developing technology ecosystem, strong supplier base, extraordinary location and qualified workforce.

Bypassing Import EU’s Tariffs

Combined with a similar facility that BYD company is already building in Hungary, the recent announcement adds momentum to BYD’s ambitions to become a key player in the European market and localise production to avoid import tariffs. 

Both the European Union (EU) and Turkey, which are part of the EU’s Customs Union, introduced steep tariffs on the imports of Chinese EVs in June this year.

In March, Turkiye announced an additional 40% import tariff on electric vehicles imports from China. On June 8, the measure was expanded to any car import from China to increase and protect the falling share of domestic production in the domestic market, taking into account the developments of the foreign trade balance and its current account deficit targets, and also to encourage domestic investment and production.

“Our approach wants to make sure that companies are manufacturing new energy vehicles in Turkiye. Tariffs are part of this effort. The idea is to protect the automotive ecosystem in Turkey, including customers, and encourage manufacturers to produce in the country,” Daglıoglu explained.

On June 12, the European Commission introduced its own additional provisional tariffs of up to 38.1% — which apply on top of the existing 10% tariff — on the import of Chinese vehicles, as it concluded that the value chain in China benefits from unfair subsidisation, which is causing a threat of economic injury to EU battery EV producers. As regards BYD specifically, the company was given an extra 17.4% tariff.

Speedy Working Motors, a subsidiary of China’s Brilliance Auto Group, also submitted a proposal to the Turkish government earlier to build a plant in the country able to produce 50,000 vehicles per year, the fDi report said.