Tough EV import rules may change strategies towards fleets in Turkey
The competition in the global electric vehicle (EV) market becomes fiercer each year, with major EV makers encountering each other in new emerging markets. However, the strict import regulations set in Turkey may force brands such as BYD and Tesla to change strategies and increase their attention to fleets.
In terms of electrification, 2023 has been a critical year for many countries in surpassing the ‘adaptation threshold’, while it was also an exceptional year for Turkey. The first ever domestic car and EV, TOGG, was released in March, followed by the launch of Chinese BYD and the American giant Tesla, luring a tremendous attraction from the Turkish consumer market.
Sales figures in 2023 increased eightfold from 2022, reaching 68,700. Most importantly, 66,000 EVs sold were battery electric vehicles (BEVs), compared to 2,700 plug-in hybrid vehicles (PHEVs).
The convergence of several foreign brands and the first domestic car triggered an interesting consumer reaction in Turkey. After a five-year research and development period, the long-awaited TOGG surpassed expectations and received the highest demand, even surpassing Tesla’s first-released Model Y AWD (all-wheel drive).
According to the Turkey Automotive Distributor’ and Mobility Association (ODMD), deliveries of TOGG reached 4,401 in November 2023, while Tesla deliveries were 900. As of the same date, total deliveries of TOGG were 13,572 and Tesla’s 11,600.
While TOGG appeared the most favoured in the Turkish EV market, the anti-subsidy inquiry launched by the European Union (EU) against China made the government re-calculate import strategies (it must be noted that the current TOGG model has not yet received the Euro NCAP certification).
High customs and regulations are in place
It was most likely not a pleasant surprise for BYD. Just after the brand signed a memorandum of understanding with a local distributor in March 2023, the Turkish government announced that “an additional 40% customs duty will be placed on EVs imported from China.”
This announcement supports many forecasts from Turkish experts that Turkey is not only taking a protectionist stance on its domestic EVs but also trying to lower the trade deficit by increasing taxes on streaming Chinese EVs. Dozens of foreign EV makers are active in Turkey, including Chinese and China-owned brands, such as Chery, DFSK, Hongqi, Leapmotor, MG, Skywell, and Voyah, alongside BYD. China sold US$184 (€171,382) million of EVs to Turkey in the first ten months of 2023.
On the other hand, China and Turkey are strengthening ties over EV development. Back in 2020, TOGG struck a partnership with Chinese Farasis Energy to supply batteries. Most recently, Turkish Industry and Technology Minister Mehmet Fatih Kaçır visited China in December 2023 and held meetings with several EV and battery manufacturers, including GAC AION, Chery, Zeekr, BYD, SAIC, Farasis and Huawei.
Turkey nevertheless continued to strengthen its position in the increasingly fierce global EV market by adding a new regulation in December 2023 concerning all EV makers. The regulation requires EV manufacturers exporting vehicles to Turkey to have at least 20 combined service points nationwide. Considering the demographic structure and consumer demand in Turkey’s seven regions, the regulation requires a well-executed and highly costly expansion plan for EV makers desiring to grab a portion of the vast Turkish consumer market.
‘Fleets need a widespread service network’
From the perspective of Turkish experts, the Ministry of Commerce’s new regulation is essential in protecting the consumer and fleet market from products that may quickly turn into electronic waste, especially the brands that don’t provide adequate after-sales services.
Experts say a widespread service network across the country is indispensable for fleet operations, as the regulation has taken a useful step for the fleet industry. Additionally, the regulations impacted the exports of some prominent manufacturers, mainly from China.
In the long term, fleet industry experts believe that increased products and services from well-known brands in Turkey will benefit Turkey’s charging infrastructure and intensify the transition to electric power in the fleet industry. Furthermore, the domestic initiative TOGG will penetrate more fleets with the upcoming new models in a healthy EV market.
The main photo shows a BYD Atto 3 in Turkey, courtesy of Shutterstock, 2397277583.
