Turkey’s auto industry is stepping up efforts to keep pace with the global shift toward electric vehicles as the European Union, its main export market, tightens restrictions on petrol powered cars.

Nikkei noted Ford’s joint venture in Turkey plans to spend EUR2bn (US$2.3bn) to start production of electric commercial vans in 2023.

Turkey also looks to roll out its first domestically developed EVs in 2022 under a government backed project, the report said.

Nikkei said the country was following Europe’s carbon-free initiatives in the hope of becoming an EV manufacturing hub and boost its industrial competitiveness.

Haydar Yenigun, general manager of Ford Otosan, a joint venture with Koc Holding of Turkey, told Nikkei demand for EVs in Turkey was growing yearly as the COVID-19 pandemic raised public interest in sustainability amid tighter regulations on petrol-powered cars.

The company hopes to achieve carbon neutrality in passenger car production by 2026 through sales of EVs and hybrid vehicles in the European Union, Yenigun told Nikkei. By 2030, all Ford Otosan passenger cars would be electric, he said.

In the first half of 2023, the company plans to start producing fully electric and hybrid variants of the next version of its Transit van for Europe. The vehicles will be assembled at Golcuk in Kocaeli Province in northwest Turkey. Ford Otosan wants to build EV production lines and also manufacture batteries.

Nikkei noted the EUR2bn earmarked for the project would be among the largest investment in the country’s auto industry. While details of the production plan have not been revealed, the company’s annual output is expected to increase to 650,000 units from 440,000.

The report said Ford Otosan accounted for a quarter of Turkey’s car exports. President Recep Tayyip Erdogan had said the new investment would increase the company’s annual exports to $13bn from $5.9bn.

Nikkei also noted Turkey, which has a Customs Union trade agreement with the EU, is a major production centre for cars sold in Europe [Hyundai and Toyota also have plants there]. Since Turkish consumers tend to prefer imported cars to domestics, 70% to 80% of the 1.5m vehicles produced annually in the country are exported, mainly to Europe.