BYD, the world's largest electric car maker, has agreed to invest $1 billion to set up a manufacturing plant in Turkey, with a deal signed in Istanbul between Fatih Kacır Mehmet, Turkey's Minister of Industry and Technology, and BYD Chairman Wang Chuanfu in a ceremony attended by Turkey's President Recep Tayyip Erdogan.
The Turkish state news agency Anadolu reported that the plant, which will start production by the end of 2026, would have capacity to produce up to 150,000 EVs a year.
Announcement of a BYD manufacturing plant in Turkey could be good news for European consumers, who can look forward to cheaper vehicles. It heralds more competition for European carmakers, who have warned of China's dominance in the sector, particularly in the affordable segments, where some of them have begun to redouble their efforts.
The agreement with Turkey is also a boost for BYD, as Chinese EV makers are facing increasing pressure in the European Union and the US. Turkey is part of the EU's Customs Union, allowing vehicles manufactured in the country to enter Europe without additional tariffs.
The European Union last week raised tariffs on Chinese EVs to protect the continent's motor industry, adding an extra tariff of 17.4 percent on vehicles imported from China, in addition to a 10 percent import levy.
The move follows a US decision in May to bump up levies on $18 billion worth of Chinese imports, including a 100 percent tax on Chinese EVs (up from 25 percent) and a doubling of the duty on Chinese solar cells to 50 percent from 25 percent.
BYD, which last year trumped Tesla to become the world's largest EV company, has been setting up plants globally.
Last year, the company announced it would build a manufacturing plant in Hungary, also an EU member state.
Last week, it opened an EV plant in Thailand, its first in the Southeast Asian region. The Thai plant too will have annual capacity of 150,000 vehicles.
The company is also reportedly building an EV plant in Mexico, which would allow it to access North American (and the US markets), without additional duties. However, BYD management has claimed that its Mexico plant is not aimed at the US market.