BYD has agreed with the Turkish government to build a US$1bn production plant in Turkey with annual capacity for 150,000 vehicles, Turkey’s industry and technology minister said last night.

Minister Mehmet Fatih Kacir posted pictures on social media platform X of Turkish president Tayyip Erdogan meeting BYD chief executive Wang Chuanfu at a deal signing ceremony for the plant, Reuters reported.

“We envisage that BYD will establish an electric and rechargeable hybrid car production facility with an annual capacity of 150,000 vehicles and an R&D centre for mobility technologies in our country, with an investment of approximately US$1bn,” Kacir said.

“The facility, which is planned to start production at the end of 2026, will directly employ up to 5,000 people.”

Reuters noted the European Union last week raised tariffs on Chinese EVs to help protect its industry. The deal could ease the access of investors, including BYD, which is the largest EV producer in the world, to European markets given Turkey’s customs union with the EU, Kacir said.

He added the deal was the outcome of talks held with Chinese officials since a visit to China in December 2023.

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Reuters noted China’s state-backed Securities Times earlier reported – without mentioning Turkey – BYD had agreed to build a factory for core parts of new energy vehicles that would backstop capacity of its factory in the southern city of Shenzhen.

Last week, a deputy chairman of Turkey’s ruling AK Party told Reuters that Chinese carmaker Guangzhou Automobile Group was in talks with Turkish EV manufacturer TOGG over a possible joint production venture.

GAC’s top management plans to visit TOGG in Turkey this month, the AK Party’s Zafer Sirakaya said.

Electrive said the pro-government Turkish newspaper Yeni Safak said BYD had been allocated an area in the province of Manisa (north of the port city of Izmir) for the new plant site. Volkswagen was said to have been interested in this site a few years ago.

Turkey has a supplier base and trained workers having already been home to the likes of Ford, Hyundai, Toyota, Fiat and Renault plants supplying domestic and export markets.

The country recently slapped a 40% tariff on Chinese car imports to protect its local industry.

BYD is also building a plant in Hungary, has one operational in Thailand,  a factory in Uzbekistan building two plug-in hybrid models, has taken over a former Ford factory in Brazil and is looking for a site for a plant in Mexico.

The Turkish plant will give access to the EU and the Mexican plant will supply the North American free trade area.