Is Turkey Becoming an Electric Vehicle Hub? EU Law & China

1. Europe's Protection Shield: The 55% Local Content Rule

The European Union bitterly realized that its giants like Volkswagen, Stellantis, and Renault could not compete on price against their Chinese rivals (BYD, MG, Chery, etc.). An electric vehicle produced in China can be manufactured about 30% cheaper than one produced in Europe. To prevent this unfair competition, the EU Commission introduced additional customs duties reaching up to 38% on China-origin vehicles.

Accordingly, for an electric vehicle to be considered "European Made" and sold to EU countries with zero customs duty, at least 55% of the vehicle's total value must be produced in Europe (or in Turkey by virtue of the Customs Union agreement).

Exactly at this point, the system gets stuck: the battery problem.

• 🔋 About 40% of an electric vehicle's total production cost comes from the battery pack.
• 🏭 More than 75% of electric vehicle batteries worldwide are produced in China.
• ⚠️ Result: If you import the battery as a ready pack from China and put it into the vehicle, even if you produce all other parts (body, tires, glass, seats) in Europe or Turkey, reaching the 55% local content rate is almost mathematically impossible.

2. Chinese Giants' Genius Plan: The "Back Door" Turkey 🇹🇷

Chinese brands know that directly bringing vehicles to the European market is no longer profitable. Although they try to set up factories in countries like Hungary and Poland, Europe's high labor costs, union barriers, and heavy bureaucracy slow things down. At this point, Turkey enters the scene as a savior angel (or Trojan horse).

Thanks to the Customs Union Agreement Turkey has with the EU, industrial products manufactured in Turkey or subjected to sufficient assembly operations can enter Europe with zero customs. Additionally, Turkey's tremendous experience in the automotive supply industry (supply chain), skilled and more cost-effective labor compared to Europe, and logistical advantages are an unmissable opportunity for Chinese giants. BYD's massive $1 billion investment in Manisa is only the first step of this strategy.

How Do They Solve the Math? Here Is the Key Strategy:

If bringing the battery entirely from China breaks the local content rate, brands apply the following formula:

1. Bring the real secret of the battery, the "Chemical Cells" (LFP or NMC cells), duty-free from China to Turkey.
2. Do the "Battery Pack Assembly" operation, where these cells are combined with software and cooling systems are integrated, in the factory in Turkey. This operation causes part of the battery's value to be counted as "local."
3. Source the vehicle's body sheet, headlights, tires, wheels, seats, and glass from Turkey's strong automotive supply industry (Bosch, Brisa, Şişecam, etc.).
4. Result: The vehicle is considered 60%+ of Turkish (and therefore EU) origin. The vehicle leaving the Turkey factory boards the ship and is sold to the German, French markets with zero customs without hitting the 38% additional duty.

3. Investment Map Directed to Turkey

Electric vehicle investments directed to Turkey are not limited to BYD. The table below summarizes the main investment intentions publicly announced and their strategic focus points:

This table is concrete evidence of Turkey's potential to transform not only into an assembly point but also into a battery production hub. For Turkey's general outlook in the EV market, our 2026 electric vehicle purchase guide and 2026 long-range EV list present an up-to-date picture.

4. Turkey: Assembly Factory or Technology Hub?

Turkey is currently standing on the threshold of a historic opportunity. If we allow Chinese giants to use our country only as a "screwdriver factory" (an assembly base where only parts are put together) to bypass the customs wall, although we gain employment in the short term, we cannot create technological added value in the long term. This scenario may resemble the textile sector experience of the early 2000s: high production volume, low added value.

However, if we multiply initiatives like the Siro Battery investment in the TOGG-Farasis partnership or the Ford-LG-Koç Holding battery factory project in Ankara, the game changes completely. If we manage to attract not only the pack but also the "cell" production, which is the heart of the battery, to Turkey, our country will become not only the back door of Europe but one of the world's largest and indispensable technology hubs in electric mobility, autonomous driving, and energy storage.

For TOGG's roadmap, our TOGG 2026 campaigns and T8X Bedrock roadmap article provides an up-to-date reference.

5. Impact on Consumers: Price, Range, and Second-Hand Value

This activity on the industry side reflects to end users through three channels. First is price: A Chinese EV produced in Turkey may have a 10-20% more affordable tag than its imported counterpart in the medium term; however, this price advantage is quite sensitive to currency and incentive changes. Second is spare parts and service: domestic production reduces the supply time of critical parts (brake pads, cabin filter, undercarriage) to the level of days.

The third is the least discussed but most burning dimension: second-hand value loss. When a brand starts production in Turkey, the value of imported earlier batch vehicles may drop rapidly. Imported Chinese EVs purchased between 2025-2027 may experience serious depreciation shock when the same model transitions to local production in Turkey. For general value dynamics in the electric vehicle segment, our Tesla vs BYD comparison provides a useful benchmark.

Frequently Asked Questions

How does the 55% local content rule affect vehicles produced in Turkey?

Parts of a vehicle produced in Turkey or sufficiently processed in Turkey are considered "local" under the EU Customs Union. Therefore, production in Turkey is the most practical legal way for Chinese brands to enter the EU market with zero customs. However, this requires the vehicle to be at least 55% genuinely of Turkey or EU origin; simple label changes on one front are not accepted.

Will Chinese EVs produced in Turkey be cheaper?

Generally yes, but a dramatic drop should not be expected. Although import taxes and logistics costs decrease, the return on local production investment is also reflected in the price. A 10-20% price advantage is reasonable in the medium term; currency and incentive policies are the main determining factors.

When does leasing rather than buying an electric vehicle make sense?

While technology changes rapidly and charging infrastructure is still maturing, 3-4 year operational leasing structurally protects the consumer from second-hand value loss and technological obsolescence risks. Especially in usage above 20,000 km per year, leasing is a strong alternative in the economic balance.

How does TOGG get affected by this new picture?

The picture is two-sided for TOGG. On one hand, Chinese brands producing in Turkey intensifies competition in the domestic market; on the other hand, the strengthening of Turkey's battery and technology infrastructure deepens TOGG's supply chain. Long-term success depends on how quickly TOGG can scale its battery cell production (Siro) breakthrough and capabilities on the software-artificial intelligence side.