China’s largest electric vehicle (EV)manufacturer BYD has signed a $1bn deal to build a manufacturing plant in Turkey, as the company continues to expand globally amid pressure from EU and US regulators.

The new plant will produce up to 150,000 vehicles a year and will start production by the end of 2026, the BBC reported. 

The news comes as EV manufacturers in China face increased pressure from US and EU regulators.

On Friday (5 July), the EU enforced new tariffs on individual manufacturers which range from 17.4% to 37.6%. This was placed on top of an already 10% import duty for all EVs imported from the country.

The new tariffs were another setback for the country which has been locked in a trade war with the US which escalated in 2022.

Turkey is part of the EU’s Customs Union which means vehicles made by BYD in the country and exported elsewhere will not be subject to the tariff.

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The US also increased tariffs on China’s EV in May, which included a 100% border tax. This was to protect US jobs and combat unfair prices, according to US President Joe Biden.

BYD, the world’s second larger maker of EVs after Tesla, has been trying to expand out of China.

In December, the company announced it was building a passenger car plant in Hungary which it said would create thousands of new jobs.

The facility is due to start operation in three years and marked the first Chinese car manufacturing plant in the EU.

China continues to dominate in EV market share

China has remained the dominant country in EV production. The country sells and produces the most EVs globally and has access to the majority of raw materials needed for the batteries.

The country’s ascent in the industry has been fueled by government incentives that pushed buyers towards electrified options, as well as the fact that China’s urban areas are relatively smaller than those in the West.

In 2016, China accounted for 49.7% of all EVs built by volume, far ahead of the next largest production locations with Europe producing 19.6% of the volume, followed by North America with 21.8%, according to research and analysis company GlobalData’s EV Thematic Intelligence 2023 report.

In 2020, China’s share of the market fell to 46.2% following the rapid growth in North American capacity, pushed on by the success of Tesla.

However, in 2021, China’s share rocketed up to 60.5% of all EVs produced. This was partly fuelled by Chinese companies increasing installed production capacity by more than five times to over five million units.

The increase was also down to better insulation of China’s battery supply and semiconductors, while western companies struggled with disruption from the pandemic, according to GlobalData.

EV production in China is expected to continue to grow greatly, with millions of extra units expected every year. However, its dominance could slowly diminish as other regions establish stronger capacity.

Europe is now the second largest EV producer and will retain that position through to 2036, when it will hold 33.5% of the market share, GlobalData forecasts.