Continuing its overseas expansion, BYD, China’s largest electric vehicle maker, has reached a $1 billion deal to build a factory in Turkey.
The new plant will have the capacity to produce up to 150,000 cars a year, according to Turkey’s Anadolu news agency. It will create about 5,000 jobs and start production by the end of 2026. The deal was signed at a special event attended by Turkish President Recep Tayyip Erdogan and BYD CEO Wang Chuanfu.
The investment comes as both the European Union and the United States are increasing pressure on Chinese electric vehicle companies. BYD last week faced an extra 17.4% tariff on vehicles it ships from China to the EU, which were already subject to a 10% import duty.
The advantage of the Customs Union
Among other things, the Chinese want to take advantage Turkey – European Union Customs UnionS. Any vehicles manufactured on Turkish soil will be able to avoid the extra 17.4% tax for their sale in European Union countries.
However, it is worth noting that Turkey has also imposed a 40% tariff on Chinese car imports to support domestic car manufacturers. The US, in turn, has imposed a 100% tariff on Chinese electric vehicles.
BYD’s other overseas investments
The Turkish plant is BYD’s second major foreign investment announcement in as many days. Last Thursday, it inaugurated its first plant in Thailand, which will have an annual output of 150,000 vehicles and is expected to create 10,000 jobs. Construction of a new plant in Mexico is also underway.