Can Türkiye drive into the heart of Europe’s EV automotive market?

From unveiling its first domestically produced electric car, the Togg, to the ongoing talks in securing multi-billion-dollar investment deals, Türkiye is transitioning from a key manufacturing hub to a central actor in Europe’s automotive transformation.

The stakes are high: as the global industry shifts toward electric mobility, driven by innovation and tightening environmental regulations, Türkiye aims to carve out a significant role in this competitive landscape.

Türkiye’s Togg project exemplifies the country’s ambitions in the EV market.

Since its 2023 launch, the T10X SUV has captured nearly 30 percent share of the domestic EV market. Togg plans to expand into Europe, with the T10F sedan set to debut by 2025, featuring technology like AI-assisted driving and vehicle-to-grid capabilities.

President Recep Tayyip Erdogan recently unveiled a $4.5 billion incentive package aimed at attracting global battery manufacturers and bolstering the country’s position in the EV supply chain.

“We aim to become a regional production base by building a capacity of 80 gigawatt-hours by 2030,” Erdogan said at an event in Istanbul, highlighting the strategic importance of batteries in Türkiye’s automotive ambitions. “We have made battery production a priority area for our automobile industry to remain competitive.”

Togg has teamed up with Chinese battery maker Farasis to enhance local production capacity. Meanwhile, Ganfeng Lithium, the world’s largest lithium supplier, has committed $500 million to build a facility in Türkiye.

These initiatives underline the country’s aspirations to become a major player in EV battery production.

Baran Celik, chairman of the Uludag Automotive Industry Exporters' Association (OIB), stressed the importance of developing comprehensive infrastructure to support these goals.

“First and foremost, building a robust capacity for battery production and energy storage technologies is critical. Local production of batteries, the heart of EVs, and integrated supply chain solutions will boost our competitiveness,” Celik said.

Celik also called for stronger collaboration between the public and private sectors to drive EV adoption and expand demand. These efforts, he argued, are essential for Türkiye to establish itself as a leader in the rapidly evolving global EV market.

By integrating Türkiye’s extensive automotive expertise into the growing EV ecosystem, Celik expressed confidence in the country’s potential. “It is possible to secure a permanent place among global players,” he said.

Luring global investments

Türkiye’s automotive industry is becoming a magnet for international investments, particularly from EV-focused players.

Among the standout deals is a $1 billion agreement with Chinese EV giant BYD to establish a state-of-the-art production facility with an annual capacity of 150,000 vehicles by 2026. This initiative is set to generate 5,000 jobs and marks a significant step in Türkiye’s ambitions to become a regional EV manufacturing hub.

BYD’s CEO Wang Chuanfu cited Türkiye’s skilled workforce, strategic location, and robust supplier network as key factors in the decision.

This momentum in attracting major investments continues with ongoing negotiations with another prominent Chinese manufacturer, Chery.

These discussions, which included a meeting between Turkish President Recep Tayyip Erdogan and Chery International’s president Guibing Zhang in Istanbul, demonstrate Türkiye’s growing appeal as an automotive manufacturing hub.

“BYD's investment in Türkiye and ongoing negotiations with other Chinese automotive companies clearly demonstrate Türkiye’s potential to become a future automotive production hub for Europe and global markets,” tells Celik TRT World.

Türkiye’s competitive production costs, a Customs Union with the European Union, and government-backed incentives—ranging from tax breaks to land allocation—have enhanced its appeal.

“We foresee that the localisation rate can be increased over time within a specific framework, aiming to exceed 51 percent,” says Celik.

Celik also highlighted Türkiye's growing appeal in the global automotive sector, noting ongoing discussions with international electronic component suppliers to expand operations in the country. While progress in the metal sector remains limited, Celik expressed confidence that increased competition will drive its integration.

Türkiye’s comprehensive investment support programme plays a crucial role in attracting such investments, offering attractive incentives, including land allocation, extensive tax breaks, and various support for new plug-in hybrid and electric vehicle plant investments.

A key requirement of this programme is a minimum annual production capacity of 150,000 units, with provisions for tariff-free local market sales.

Home to global giants

Türkiye’s automotive landscape already hosts global heavyweights like Ford, Renault, Toyota, Hyundai, and Mercedes-Benz, with an annual production capacity nearing 2 million vehicles.

Celik, the head of Türkiye’s only export representative association for the automotive industry, emphasises the importance of longstanding collaboration models with international automotive giants like Mercedes, Toyota, and Renault, which enhance Türkiye’s competitiveness and innovative capacity in the global automotive market.

By working with these brands, “we facilitate technology transfer and achieve world-class standards in production processes,” Celik said.

Underlining Türkiye’s high-quality production infrastructure and experienced workforce, “These collaborations accelerate Türkiye’s adaptation to next-generation vehicle technologies while allowing us to enhance our capabilities in future trends such as electric and autonomous vehicles,” he added.

Through these collaborations, Celik said, Türkiye has established itself as an innovative solutions provider and a reliable partner in the rapidly changing global automotive market.

Ford Otosan, for instance, serves as Ford Europe’s commercial vehicle hub, leading the global production of Ford Transit models. Meanwhile, Fiat’s Tofas manufacturing operation in Bursa is set to produce 1 million light commercial vehicles by 2032, backed by a €232 million ($250 million) investment.

Record year for automotive exports

In 2024, Turkish automotive exports reached $30.51 billion in the first 10 months alone—a 6.5 percent year-on-year increase.

Accounting for 14.1 percent of the country’s total exports, these shipments primarily targeted Europe, with 83 percent destined for markets such as Germany, the UK, and France.

Türkiye’s Trade Minister Omer Bolat highlighted the sector’s growth trajectory, with annual vehicle production increasing 4.5-fold between 2002 and 2023, cementing Türkiye’s position as Europe’s fourth-largest automotive producer.

This success underscores Türkiye’s integration into European automotive supply chains, bolstered by production hubs in cities like Kocaeli, Bursa, and Istanbul.

Strategic location and policy support

Celik highlighted the country’s strategic assets—its skilled workforce, advanced production infrastructure, and geographical proximity to key markets—and asserted that Türkiye is well-positioned to lead in emerging trends such as electric and autonomous vehicle technologies.

"Global shifts in supply chain dynamics and challenges faced by traditional automotive markets, such as rising costs, energy crises, and logistical disruptions, have further highlighted Türkiye’s advantages,” Celik said.

Türkiye’s adaptability has also been a key strength. The country’s flexible, customer-centric production approach enables it to respond to shifting global demands.

Underlining the role of Free Trade Agreements and investment incentives, Celik said, “We believe that this growing interest will significantly contribute to our goal of becoming a global centre in the automotive sector.”

Celik emphasised that Türkiye is striving to solidify its global competitiveness by focusing on research and development, innovation, and design. “With our focus on R&D, design, and innovation, Türkiye’s automotive industry has secured a highly competitive position globally,” he said.

“The launch of Türkiye’s first domestic electric car, Togg, further demonstrates our vision and strength in alternative energy vehicle production,” he added.