EV makers modify engines for Turkish market for lower tax
ISTANBUL
Electric carmakers are adjusting the engine powers of their vehicles so that consumers pay lower taxes, which serves as a kind of incentive to buy EVs.
In the past, carmakers resorted to a similar method to boost sales. They designed 1.5-liter or 1.6-liter engines, especially for the Turkish market which would fit into lower tax brackets and made those vehicles more accessible.
This time round, electric carmakers are employing the same strategy. Some companies update their software to reduce the engine power of their vehicles to a limit of up to 160 kW, which benefits from the special consumption tax (SCT) brackets between 10 percent to 40 percent.
First carmaker BMW resorted to this method for the electric vehicles it sells in the Turkish market. It adopted this strategy in Türkiye for its i4 and i5 model cars in 2023.
Acting on the advice from Borusan Otomotiv, which distributes BMW vehicles in the country, BMW lowered the engine power of those models from 250kW to 160kW, specifically for the Turkish market. So that those vehicles would meet the conditions for a 40 percent SCT bracket instead of 60 percent.
The price of the i4 model vehicle eventually declined by around 1.3 million Turkish Liras to 3.4 million liras ($108,942), while the price of the i5 model dropped by 12 percent.
Volkswagen is expected to follow suit by introducing a version of its Passat model with a customized engine. The carmaker is preparing to offer its Sedan ID.7 model to Turkish consumers with 150kW engine power instead of regular 205kW.
They previously looked into options to make the ID.7 model fit into the 10 percent tax bracket, said Gino Bottaro, general manager of Volkswagen Passenger Vehicle Brand.
The ID.7 model vehicle could be introduced to the local market with a reduced engine power -150kW instead of regular 205kW, Bottaro said.
Selling this model with reduced engine power is not a case special to Türkiye but the strongest market for this particular car will be the Turkish market, according to the company executive.
Volkswagen’s ID.4 and ID.5 models will be introduced to the local market in the second quarter of this year, while the ID.7 and ID.3 models start selling in the third and the final quarters, respectively, he added.
The carmaker aims to sell 7,000 electric vehicles this year.
In January, electric vehicle sales in Türkiye surged 271 percent from a year ago to 3,973, accounting for 6.2 percent of all car sales in the country.
In 2023, a total of 72,179 electric vehicles were sold, marking a staggering 833 percent increase from the previous year.
