Springboard to EU? BYD poised for US$1 billion electric car plant in Turkey, officials say

Turkey will soon unveil an agreement with BYD to construct a US$1 billion plant in the west of the country, Turkish officials said, boosting the Chinese carmaker’s presence in Europe at a time of escalating trade tensions.

Turkey’s President Recep Tayyip Erdogan is expected to announce the accord on Monday during a ceremony in Manisa province, where the plant will be built, the officials said, asking not to be named because they aren’t authorised to speak publicly. BYD representatives and the president’s office declined to comment.

The new factory would improve BYD’s access to the European Union, because Turkey has a customs-union agreement with the bloc. The EU moved ahead this week with plans to impose provisional tariffs on electric vehicles imported from China, hitting BYD with an additional 17.4 per cent charge on top of the existing 10 per cent rate.

There’s also a domestic market to serve, with EVs accounting for 7.5 per cent of car sales last year in Turkey, a country with a population of almost 90 million.

Turkey announced Friday that it was walking back plans announced almost a month ago to impose an additional 40 per cent tariff on all vehicles from China, citing efforts to encourage investment. That decision followed talks between Erdogan and China’s President Xi Jinping on Thursday during a meeting of the Shanghai Cooperation Organisation in Astana, Kazakhstan.