China EV giant BYD to invest $1 billion in Turkey production plant

SINGAPORE (ICIS)–Chinese electric vehicle (EV) giant BYD has agreed to invest $1 billion to set up a manufacturing plant in Turkey which will produce up to 150,000 vehicles per year.

BYD is expected to begin production at the new factory at the end of 2026, Turkey’s vice President Cevdet Yılmaz said in a post on social media platform X on Tuesday.

“We expect this investment to make significant contributions to our exports in the medium term and to further reduce our already falling current account deficit,” Yilmaz said.

BYD declined to comment on the deal when contacted by ICIS. The company has not issued a official statement on the investment.

The Chinese company is the world’s leading EV producer, with annual sales of around 3 million units.

The automotive industry is a major global consumer of petrochemicals, which account for more than a third of the raw material costs of an average vehicle.

EVs and associated battery markets provide growth opportunity for the chemical industry, with chemical producers separately developing battery materials, as well as specialty polymers and adhesives for the environment-friendly vehicles.

Turkey’s announcement of BYD’s investment comes amid a backdrop of heightened scrutiny of Chinese EV manufacturers within the EU and the US.

On 4 July, the EU increased tariffs on Chinese EVs in an effort to safeguard the bloc’s automotive industry.

As a result, BYD now faces an additional 17.4% tariff on top of existing 10% import duty on its vehicles shipped to the EU.

However, Turkey, being part of the EU’s Customs Union, is exempt from this extra tariff, providing an advantage for vehicles manufactured there and exported to the bloc.

Separately, Turkish state news agency Anadolu said that SWM, another Chinese automaker, also announced it was applying to build a factory in Turkey on 8 July, but no details were provided.

The Chinese automaker opened a new factory in eastern Thailand’s Rayong district on 4 July which can produce 150,000 vehicles per year – the automaker’s first factory in southeast Asia.

Focus article by Nurluqman Suratman

Initial reporting by Fanny Zhang

Thumbnail photo: BYD’s first car carrier ”BYD Explorer 1” is loading cars for export at Yantai Port in Yantai, Shandong province, China, on 5 July 2024. (Source: Costfoto/NurPhoto/Shutterstock)