BYD's decision on Turkey: Starting production earlier

Chinese company BYD, one of the world's largest electric vehicle manufacturers, has postponed the start of production at its 4 billion euro electric car factory currently under construction in Szeged, Hungary, to 2026. According to sources speaking to Reuters, the factory will not be able to operate at full capacity for the first two years and will only be able to produce a few tens of thousands of vehicles.

The facility, which was initially established with an annual production target of 150,000 vehicles, will not reach its ultimate capacity goal of 300,000 until after 2027. BYD has not yet clarified which models it will produce at the Szeged facility, which it previously announced would be operational in October 2025. The Atto 2, Atto 3, Dolphin, and low-cost Seagull models are among the options.

PRODUCTION PRIORITY SHIFTS TO TURKEY

At BYD's Manisa factory in Turkey, the wheels will start turning sooner than expected. According to information obtained, the facility, which was realized with a 1 billion dollar investment and has an annual production capacity of 150,000 vehicles, will begin mass production at the end of 2026.

Moreover, according to sources, this factory will produce more vehicles than the Hungarian facility from its first year of operation. The 150,000-vehicle production milestone will be exceeded in 2027, and capacity will be significantly increased in 2028.

STRATEGIC MOVE FOR TAX-FREE EXPORTS TO THE EU

The majority of the vehicles to be produced at BYD's Manisa factory will be exported to European Union countries. Thanks to the Customs Union between Turkey and the EU, these exports will not be subject to any customs duties.

This move is of great importance for bypassing the tariffs of up to 27 percent imposed by the European Commission on Chinese-origin electric vehicles. Hungary, which was planned as BYD's production hub in Europe, has ceased to be the Chinese giant's primary preference due to high labor costs, despite its customs advantages.

PLANS IN HUNGARY SLOWED DOWN

Sources reported that the installation of production line machinery in Hungary has been delayed and that some equipment produced in China was delivered late. It was also stated that BYD has slowed down its plans to accelerate production for economic reasons.

The Szeged factory, which will begin production in 2026, will not be able to operate at full capacity initially. Production will only increase in 2027, but it is projected that it will not reach the planned levels.

GROWTH IN THE CHINESE MARKET HAS SLOWED, EYES TURNED ABROAD

BYD has slowed its growth in the domestic market due to increasing competition and price wars in China. Shifts have been reduced at some production facilities, and new line installations have been postponed. For this reason, the company is focusing on its overseas investments.

Turkey, having hosted major manufacturers such as Renault, Toyota, Ford, Hyundai, and Stellantis, presents an attractive alternative for BYD. Cheap labor, logistical advantages, and tax-free access to the EU bring Turkey to the forefront.

CONTROVERSIAL PROCESS IN BRAZIL

BYD continues to expand not only in Europe but also in Latin America. The company, which continues to expand its factory in Brazil, has faced legal processes here due to allegations of worker abuse involving Chinese contractors.