Electric cars, will Chinese BYD conquer Europe from Türkiye?
BYD will build a $1 billion electric and hybrid car plant in Türkiye. In this way the Chinese company will bypass European duties, given that Ankara is part of the EU customs union
The Chinese company BYD, which competes with Tesla for global leadership in the sale of electric cars, has reached an agreement with the government of Turkey to build a $1 billion plant in the country. The factory will have a production capacity of 150,000 vehicles per year and is expected to come into operation at the end of 2026, creating approximately five thousand jobs.
WHY BYD CHOSEN TURKEY
BYD's interest in Turkey is explained by the desire to access the European automotive market after the Commission introduced new duties on electric vehicles imported from China : the additional rate for BYD is 17.4 percent. The European Union is considered an attractive destination for Chinese companies for various reasons: because these companies need new markets with high profit margins, given the saturation of the domestic context and the ongoing “price war”; because Brussels has focused heavily on electric mobility, so much so as to ban the registration of petrol and diesel cars from 2035; and finally why the United States became inaccessible after the 100 percent tariffs .
European duties could have the effect of encouraging the localization of electric car manufacturing on the Old Continent or in its immediate vicinity. Furthermore, BYD is also building a factory in Hungary (production should start next year) and is evaluating a second one.
Not only the European Union, however, but also Turkey has imposed additional duties on vehicle imports from China – the rate is 40 percent – to protect domestic production . The country, in fact, is home to a large automotive industry and foreign brands such as Ford, Renault, Toyota and Hyundai operate there, often in joint ventures with local companies. In 2023, Turkey produced approximately 1.5 million cars and its main export market is the European Union: being part of the European customs union, it can export cars to the Union without them being burdened by further tariffs . A condition that BYD has probably assessed as very advantageous, also considering what Michael Shu, director of the company's European division, declared in May: “ shipping cars from China to Europe is not a long-term solution. The long-term solution is to produce locally."
“A CENTER FOR INNOVATION”
Turkey's Industry Minister Mehmet Fatih Kacir called the deal with BYD an example of the country's “potential” to be not only a center for international investment, but also a center for innovation and technology advanced green ”: the BYD plant, dedicated to electric and hybrid vehicles, will also contain a research and development centre.
Kacir added that the government is conducting "intense negotiations" on investments with other Asian and European automakers. In September, President Recep Tayyip Erdogan asked Elon Musk to open a Tesla factory in Turkey; there is also a state-funded project to develop a Turkish electric car.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/byd-turchia-stabilimento-auto-elettriche/ on Tue, 09 Jul 2024 14:07:37 +0000.