One billion euros for BYD to stay a step ahead in Europe

How to circumvent European sanctions on Chinese vehicles? BYD has an unstoppable solution: become European.

The European Union began imposing additional tariffs of 17.4% on vehicles shipped by BYD from China to Europe on July 5. This surcharge is added to the base 10% on all car imports. Although BYD is the star student, while MG received a punishment of 37.6%, these percentages still significantly impact the margins.

BYD, which competes with Tesla for the title of the world’s leading manufacturer of battery electric vehicles, has decided to take its future into its own hands by building a car factory in Turkey to produce 150,000 electric and hybrid vehicles per year. The cost? One billion dollars!!! The Turkish Minister of Industry and Technology, Mehmet Fatih Kaci, and BYD’s CEO, Wang Chuanfu, signed the agreement in a grand ceremony in Istanbul under the watchful eye of Turkish President Recep Tayyip Erdogan.

BYD European, but not too much

The timing is, of course, not coincidental, even though BYD’s decision could not have been made in just 7 days. A global movement that spans from the United States to Europe is underway, aiming to contain the influx of cheap Chinese cars built with what the EU considers illegal public subsidies from Beijing.

The choice of country is also not innocent. Although Turkey is not part of the European Union, it is in a customs union with the EU. This means that vehicles can be exported from the country to other member nations without tariffs.

The question remains whether this Turkish plan complements the electric vehicle factory project in Hungary or could ultimately lead to the demise of the latter. Budapest is much closer to Brussels than Istanbul…The manufacturer has not provided any information on this matter yet.

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