BYD Suspends Turkey Factory Project, Shifts Focus to European Expansion

Chinese automotive powerhouse BYD, a leading player in the global electric vehicle market, has decided to suspend its planned $1 billion manufacturing facility project in Manisa, Turkey. The company indicated that this strategic shift is part of its broader effort to prioritize localization and production operations within the European market. Stella Li, Executive Vice President of BYD, stated that the factory in Hungary is currently their top priority, and they are actively seeking a location for a second production facility in Europe.

BYD initially signed a protocol with Turkey in July 2024, announcing plans for a factory in Manisa with an annual production capacity of 150,000 electric and plug-in hybrid vehicles. The investment was also expected to include a research and development center focused on sustainable mobility technologies and create approximately 5,000 direct jobs. The Turkish government had granted BYD an Investment Incentive Certificate, providing exemptions from import duties in exchange for its commitment to local production. However, despite the initial announcement, construction on the Turkish factory has not yet commenced, and no definitive timeline has been set for the project's initiation.

This development introduces significant uncertainty regarding Turkey's aspirations to become an electric vehicle manufacturing hub. It was widely known that BYD benefited from exemptions from additional customs duties on vehicles imported from China, thanks to its investment commitment in Turkey. The suspension of the project is now expected to lead to the imposition of additional customs duties on BYD's imported vehicles, potentially resulting in price increases. Furthermore, regulatory sanctions and a substantial penalty could be imposed on BYD for not fulfilling its investment commitments.

The decision by BYD is largely influenced by the European Union's tariffs on Chinese-made electric vehicles. The company is pursuing an aggressive localization strategy to circumvent these tariffs and establish itself as a direct manufacturer within the region. Its new facility in Szeged, Hungary, is anticipated to commence full vehicle assembly production in the fourth quarter of 2026. This plant will be BYD's first passenger car factory in Europe, initially designed to produce up to 150,000 vehicles annually.

While BYD's European sales surged by 270% last year to nearly 188,000 vehicles and continued to accelerate by 144% to over 100,000 units in the first five months of 2026, its performance in the Turkish market has seen a decline. Despite being the best-selling brand in the plug-in hybrid and new-energy vehicle segments in Turkey in 2025 with 45,537 units, its sales dropped by 63.9% year-on-year to 6,726 units during January-May 2026. During this period, the domestic brand Togg surpassed BYD to claim market leadership. Analysts interpret BYD's strategic shift as an effort to enhance its global competitiveness and establish a more effective presence in its target markets, leaving the future of its Turkish investment uncertain.