A China-Turkey EV boom?

Hi readers,  

Turkey is becoming an important launchpad for China's electric vehicle (EV) ambitions and a case study in how Beijing maneuvers through a more fragmented global trade system. With the EU tightening import controls, Turkey offers Beijing a way in.  

This isn’t just about tariffs and trade routes. The latest big auto deal is representative of a larger trend: Chinese tech and EV firms are increasingly eyeing Turkey as both a manufacturing base and a strategic partner. On the surface, the partnership is thriving, but just beneath it lie political and economic trade-offs that remain unresolved. 

Sign up for the newsletter here.

Let's unpack. 

Rosaleen Carroll (@roscarroll)

Leading this week

China’s BYD is accelerating plans to build an electric vehicle (EV) manufacturing and R&D hub in Turkey, part of a broader push by Chinese automakers and tech firms to reposition themselves amid rising trade barriers, as Samuel Wendel reports.  

Originally expected to open in 2026, the plant northeast of Izmir could now begin production ahead of schedule, according to Reuters. Once fully operational, the plant is expected to produce more than 150,000 vehicles annually. 

➡️ The $1B plant gives BYD a foothold in Turkey’s customs union with the EU, allowing it to export tariff free — a critical leg up for China after Brussels imposed up to 27% in duties on BYD in 2024.

➡️ BYD is also skirting Turkey’s own tariffs: In June of 2024, Ankara granted BYD an exemption from its 40% import tariff on Chinese EVs. Just one month after the exemption was granted, the deal was finalized. 

➡️ The factory will include an R&D center, a feature BYD's $4.6 billion Hungary plant — which has recently faced delays — will not have.

➡️ BYD has announced that it aims to sell 50,000 vehicles in Turkey — more than five times what it sold last year. The company also aims to double its dealerships throughout the country. From January to June of 2025, according to Turkey's Automotive Manufacturers Association, the carmaker sold 13,608 vehicles. 

Turkey as a gateway  

In March, Turkey announced plans for a roughly $1 billion EV plant project near Samsun on Turkey’s Black Sea coast. The project involves third-party backers of China’s Chery Automobile, with plans to produce 200,000 vehicles annually.  

This announcement followed a broader trend: Turkish officials and companies have been in advanced talks with several other Chinese firms. In January, Turkish auto company Dogan Trend said it had made progress in talks with China’s state-owned SAIC Motor to establish a manufacturing plant in Turkey, which faces an EU tariff of 35%; China’s DFSK Motor, which already sells its cars in Turkey, said in June it aims to invest further in the country; and Turkish EV distributor Ulu Motor met with China’s Skywell last June to firm up investment plans.  

Beyond EVs, China’s presence in Turkey is expanding into critical minerals, tech and research. In October 2024, the two countries signed an MoU on mining cooperation, including plans to process 570,000 tons of rare earths annually from Turkey’s Eskisehir reserve. In March 2025, Turkish and Chinese research and science institutions launched joint AI and agriculture projects. And, after signing multiple MoUs in 2024, Chinese tech major Huawei and Turkey's leading telecoms company, Turkcell, reached a 50 Gbps breakthrough in 5.5G testing.

Political engagement has mirrored this industrial courtship. In June of 2024, Turkish Foreign Minister Hakan Fidan visited Xinjiang — China's Uyghur-majority region — and Beijing, the first such visit by a senior Turkish official since President Recep Tayyip Erdogan visited in 2019.  

Potential pressure points 

There are a few pressure points looming beneath the surface between Ankara and Beijing. Deals like the one with BYD could prompt the EU to revisit the terms of its customs union with Turkey or take steps to prevent what it may see as tariff circumvention via third countries.  

At the same time, Turkish state-backed automaker Togg, established in 2018, now finds itself in direct competition with Chinese entrants. While Erdogan has moved to raise taxes on EV imports, deals like the one with BYD, which allowed the company to avoid tariffs, will present a difficult challenge for the nascent Togg, because it now has to compete with the Chinese company.

Then there is the Uyghur issue. Turkey has long positioned itself as a vocal defender of the Muslim minority in China’s Xinjiang region, even broaching the issue at the UN in 2019, accusing China of “torturing” the Uyghur population. But with Erdogan investing significant political capital in deepening economic ties with Beijing, Ankara appears to be sidelining the issue. 

Presently, all seems to be going well, but the political, economic and diplomatic trade-offs being made could suggest a more complicated future. 

Photo of the week

People watch remote-controlled robots by Unitree Robotics boxing during the World Artificial Intelligence Conference (WAIC) at the Shanghai World Expo and Convention Center in Shanghai on July 28, 2025. (HECTOR RETAMAL/AFP via Getty Images)

Deals and visits ✈️

• China’s Chery Automobile launches five new models in Egypt
• GCC secretary-general meets China’s Middle East envoy at UN headquarters
• Egypt, China sign agreement to advance petrochemical project in Suez Canal zone
• China’s autonomous driving company, WeRide, secures license in Saudi Arabia
• Shanghai hosts major AI summit
• PowerChina wins $4 billion contract to build seawater desalination plant in Iraq
• Chinese, Korean companies move forward with lithium salts refinery facility in Morocco
• UAE aviation delegation visits China for meetings on enhanced aviation collaboration
• China backs UN’s two-state solution conference 

What we are reading​​​

• Growing Chinese competition in Mideast car market ‘key challenge,’ Ford says: Al-Monitor
• The US military is investing in this Pacific Island. So is China: The Washington Post
• The real meaning of Putin’s Middle East failure: Foreign Affairs