Turkish Interior Minister Fatih Kacir announced on Friday that the government is in advanced negotiations with Chinese electric vehicle (EV) companies BYD and Chery to establish factories in Turkey. Kacir emphasized the potential for these factories to boost the Chinese companies’ sales in Europe. He mentioned that talks with SAIC Motor Corp. and Great Wall Motor Co. are also ongoing for potential factory investments in Turkey.
Kacir also mentioned that Chinese firms building EV plants in Turkey would have privileged opportunities for battery investments. This move could help BYD avoid European tariff hikes and potential EU probes into China’s government subsidies for automakers, which could be seen as unfair competition.
Turkey, which has faced challenges attracting foreign investments since its involvement in Syria in 2019, could benefit significantly from Chinese EV investments. However, Turkey also has its own domestic EV company, Turkey Otomobil Girisim Grubu (TOGG), which is a pet project of President Recep Tayyip Erdogan. Despite initial success in sales, TOGG could face challenges if large Chinese companies like BYD enter the Turkish market and expand into Europe.
The potential EU tariff hikes on Chinese EVs are still uncertain, but Turkey could provide an alternative market for the Chinese companies to bypass tariffs and continue their presence in Europe. Kacir’s positive remarks about the negotiations with China mark a shift from previous restrictions imposed on Chinese EV imports in Turkey.
The possibility of Turkey accepting battery production for Chinese EVs as a compromise to attract investments and improve relations with China also raises questions about the competitiveness of Turkey’s domestic EV industry against the state-subsidized Chinese giants.
