Chinese automotive giant BYD has announced plans to start manufacturing passenger cars in Turkey by 2026, as part of a $1 billion investment project aimed at avoiding import duties and gaining easier access to European markets. The agreement, confirmed by Turkey’s Minister of Industry and Technology Mehmet Fatih Kacir, includes building a manufacturing plant with an annual capacity of 150,000 vehicles.

As the world’s largest producer of new energy vehicles (EVs and PHEVs), BYD is rapidly expanding its global presence, operating in over 100 countries and regions. Europe is a key market for the company due to its high profitability, which is reportedly ten times greater than in China. However, recent additional import duties imposed by the EU, along with Turkey’s 40% tariff on Chinese cars, have created obstacles for BYD’s growth in the region.

To navigate these challenges, BYD is establishing a manufacturing plant in Turkey, which will allow the company to bypass local tariffs and benefit from Turkey’s Free Trade Agreements with the EU, thus avoiding additional European tariffs. The new plant will also house an R&D center and is expected to employ up to 5,000 people.

The construction agreement was signed by Turkish President Tayyip Erdogan and BYD Chairman and CEO Wang Chuanfu.