BYD Quietly Halts $1B Plant Progress in Turkey, Formal Announcement Expected: Report

BYD might be halting its planned $1 billion investment in its passenger car plant in Turkey, according to industry sources and a recent parliamentary review of the project.

The deal for the factory — to be located in the Manisa Organized Industrial Zone — was signed in July 2024 by Turkish President Tayyip Erdoğan and BYD Chief Executive Officer Wang Chuanfu.

The plant is intended to have an annual production capacity of 150,000 vehicles, with the company having been granted incentives by the Turkish government, including tax exemptions.

However, 18 months later, BYD has yet to begin construction of the facility, and no timeline has been shared with the public despite recent media reports, as the opposition Republican People’s Party (CHP) lawmaker Sevda Erdan Kilic stated last week.

Reuters reported in July that BYD was postponing mass production at its first European passenger-car plant in Hungary until 2026.

The delay was said to reflect a shift in focus toward the company’s planned Turkish factory, where production was expected to start sooner due to lower labor costs.

While the delay to the Hungarian plant has since proven accurate (despite BYD first rejecting it), there were no further updates on the Turkish investment until mid-January.

At that time, construction equipment was reportedly spotted at the planned site, suggesting that work could finally be starting.

Industry Sources

Local media outlet PA Turkey reported on Thursday that the company has allegedly suspended the investment, citing sources within the industry.

One of them is Ali Suat Ertosun, a former member of the country’s Supreme Court of Appeals and current president of the Manisa Association for the Protection of Cultural and Natural Assets.

Ertosun said a formal announcement on the project’s status is expected as early as this month or March.

Parliamentary Review

Last week, Turkish Minister of Industry and Technology Mehmet Fatih Kacır was questioned in the Grand National Assembly about the status of the project.

The opposition Republican People’s Party (CHP) submitted a 10-question parliamentary inquiry addressing several issues, including how much of the $1 billion investment has been carried out, the current status of the land allocation, details of the tax exemptions granted, and potential sanctions if the investment is not completed.

In response, Kacır said the project remains under active supervision within the framework of Turkey’s investment incentive legislation, with oversight and compliance checks continuing in full.

He added that if the investment is not completed as planned, the sanctions set out in the incentive regulations would apply.

“These measures are valid for the BYD project as well. In addition, safeguard mechanisms ensure that our national interests are fully protected,” he said.

Overseas Production

Besides domestic production in China, BYD currenly operates factories in Thailand, Uzbekistan and Brazil.

The Chinese new energy vehicle maker is also building new plants in Indonesia, Malaysia and Cambodia.

Additionally, it has recently begun trial production at its European plant in Hungary, following delays in completing construction of the passenger vehicle factory.

Manufacturing fully electric vehicles in Europe will allow the automaker to avoid the European Commission tariffs imposed in October 2024 on imported EVs.

Full production is expected to begin in the second quarter and will ramp up to its planned capacity of 200,000 vehicles over several years, with employment expanding in parallel.

Last year, BYD also established its European headquarters in Hungary, saying that the office was expected to create around 2,000 jobs.

A third European factory is under consideration according to several reports; however, no location has been revealed yet.

The company aims to achieve 1.3 million sales outside China this year, a 24.3% increase year over year.

Last month, its sales more than doubled in Germany and the UK, despite its struggles to gain market share in Scandinavia.

BYD’s vehicle registrations declined overall in January, leading its stock down in both the Shenzhen and Hong Kong markets earlier this week.