Chinese rival to Tesla (NASDAQ:TSLA), BYD, is set to build a $1 billion car factory in Turkey.
The Turkish Government announced last week that BYD CEO Wang Chuanfu and Turkey’s Industry and Technology Minister Mehmet Fatih Kaci had signed the agreement in Istanbul with Turkish President Recep Tayyip Erdogan in attendance.
Production to start at end of 2026
The factory will have the capacity to churn out 150,000 electric and hybrid vehicles each year. BYD will invest around US$1 billion in the factory and plans to set up a research and development centre for sustainable mobility technologies at the plant.
Production at the factory is expected to start at the end of 2026 and provide as many as 5,000 Turkish jobs.
BYD is the number one challenger to Tesla for the title of world’s biggest battery electric vehicle maker and plans to push into Europe with its cars.
“We aim to meet the growing demand for new-energy vehicles in the region and reach consumers in Europe,” the company said in a statement.
Tariff circumvention
It’s clear there was some forward planning involved to circumvent provisional additional duties on imports of Chinese-made EVs into the European Union, which came into effect just days before the deal was made.
The tariffs, ranging from 17.4% to 37.6%, are aimed at stopping a flood of cheap Chinese cars built with what the EU deems unfair support from the government. They would be charged in addition to the 10% already levied on all car imports.
China is in talks with the EU over the additional tariff but if these fail the laws will come into effect in November.
Turkey is in a customs union with the trading bloc, meaning that vehicles can be exported to the EU without duties.
Back in December, BYD announced that it would build an EV factory in EU member Hungary, becoming the first major Chinese automaker to build passenger cars in Europe.