China’s electric vehicle maker BYD will begin building a $1 billion manufacturing facility in Turkey for its electric vehicles. To avoid unprecedented EU tariffs on imported cars, the Chinese carmaker has signed a $1 billion deal with the Turkish government to set up shop in the region.
The BYD factory will produce 150,000 electric and hybrid cars each year, according to reports. The strategic move is aimed at enhancing BYD’s logistical efficiency in serving its European customers. BYD’s decision also comes in the wake of the European Union’s recent decision to impose an additional 17.4% tariff on electric vehicles imported from China. This new tariff is in addition to the existing 10% rate. The new rate could send the price of BYD’s Dolphin supermini increase by as much as £4,000.
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BYD is one of the several manufacturers in China currently facing additional import tariffs designed to curb what the European Commission describes as “unfair subsidies” from Beijing. Turkey, on the other hand, is not part of the EU but is part of the EU Customs Union. The country did implement 40 percent tariffs on Chinese cars to protect its car manufacturing industry. However, this deal would classify the Chinese electric vehicles as not “imported.” Therefore, the BYD vehicles would not be liable for the additional import tariffs typically imposed on Chinese cars.
Production at the new facility is slated to commence by the end of 2026, bringing in approximately 5,000 new jobs. The EU has not yet commented on China’s BYD’s decision to set up the factory in Turkey.