Chinese EV maker BYD said to plan $1 billion factory in Türkiye

ISTANBUL

Chinese BYD that overtook Elon Musk's Tesla in the fourth quarter of 2023 to become the world's top seller of electric vehicles plans to build a $1 billion plant in Türkiye, according to media reports.

The plant will be constructed in the western province of Manisa, Turkish officials told Bloomberg, adding that President Recep Tayyip Erdoğan is expected to announce the investment on July 8.

German carmaker Volkswagen had considered building a factory in Manisa but later scrapped its plans.

Türkiye has been long trying to lure carmakers to the country, putting especially Chinese companies on its radar to encourage them to invest.

In December last year, Industry and Technology Minister Mehmet Fatih Kacır traveled to China where he held talks with executives of several Chinese carmakers, calling on Chinese companies to invest in Türkiye.

A presidential decree published in the Official Gazette last week eased tariffs on imported Chinese vehicles. Carmakers making investments in Türkiye will be exempt from the additional tariffs, according to the decree.

On June 8, the Turkish government announced a 40 percent additional tariff on imported fuel and hybrid passenger vehicles from China to take effect on July 7.

The additional tariff is mainly aimed at protecting local carmakers in a market where Chinese companies have been increasing their shares.

Now, if a company commits to investment in Türkiye, it will be subjected to only 10 percent regular customs duty.

Opening plants in Türkiye will also help Chinese companies have easier access to the European market. Türkiye has a customs union agreement with the EU, which last week slapped extra provisional duties of up to 38 percent on Chinese electric car imports.

Some 11 Chinese brands, including BYD, Skywell, MG, Chery, Leapmotor, Seres, Maxus, Hongqi, DFSK, NETA and SWM sell their cars in Türkiye.

Chinese brands sold around 60,000 vehicles in the country last year, capturing a 6 percent share in all sales.

In the first six months of 2024, their share in the local market increased to 8 percent.

According to data from the Automotive Distributors and Mobility Association (ODMD), BYD sold 1,426 vehicles in the January-June period, while Chery’s sales stood at 34,501. Sales of MG, Skywell and DFSK were 11,074, 200 and 184 units, respectively.

Tesla reclaimed the top spot in the first quarter of this year from BYD. The Chinese automaker recorded a record annual profit of 30 billion yuan ($4.1 billion) last year, but in April reported lower-than-expected revenue for the first quarter of 2024.

BYD has faced a bitter price war in China, where a staggering 129 EV brands are slugging it out — with only 20 achieving a domestic market share of one percent or more.