ISTANBUL — Turkey’s auto industry is stepping up efforts to keep pace with the global shift toward electric vehicles as the European Union, its main overseas market, tightens restrictions on gasoline-powered cars.
Ford Motor’s joint venture in Turkey plans to spend 2 billion euros ($2.3 billion) to start production of electric commercial vans in 2023.
Turkey also looks to roll out its first domestically developed EVs in 2022 under a government-backed project.
The country is following Europe’s carbon-free initiatives in the hope of becoming an EV manufacturing hub, and along the way boost its industrial competitiveness.
Haydar Yenigun, general manager of Ford Otosan, a joint venture with Koc Holding of Turkey, told Nikkei that demand for EVs in Turkey is growing yearly as the COVID-19 pandemic raises public interest in sustainability amid tighter regulations on gasoline-powered cars.
The company hopes to achieve carbon neutrality in passenger car production by 2026 through sales of EVs and hybrid vehicles in the European Union, according to Yenigun. By 2030, all Ford Otosan passenger cars will be electric, he said.
Haydar Yenigun, general manager of Ford Otosan. (Photo courtesy of Ford Otosan) In the first half of 2023, the company plans to start producing fully electric and hybrid variants of the next version of its Transit van for the European market. The vehicles will be assembled at its Golcuk plant in Kocaeli Province in northwest Turkey. Ford Otosan wants to build EV production lines and also manufacture batteries.
The 2 billion euros earmarked for the project will be among the largest investment in the country’s auto industry. While details of the production plan have not been revealed, the company’s annual output is expected to increase to 650,000 units from 440,000.
Ford Otosan accounts for a quarter of Turkey’s car exports. President Recep Tayyip Erdogan has said the new investment will increase the company’s annual exports to $13 billion from $5.9 billion.
Turkey, which has a Customs Union trade agreement with the EU, is a major production center for cars sold in Europe. Since Turkish consumers tend to prefer imported cars to domestics, 70% to 80% of the 1.5 million vehicles produced annually in the country are shipped overseas, mainly to Europe.
In the European market, combined sales of electric vehicles and plug-in hybrids in 2020 reached 1.33 million units, up 140% from 2019. These new energy cars comprised more than 10% of new cars sales in the region.
In July, the European Commission proposed a 100% cut in CO2 emissions by 2035, which would ban sales of new fossil fuel-powered vehicles, including gasoline-powered cars and HVs in the 27-country bloc. In the same month, the European Bank for Reconstruction and Development decided to extend a 650 million euro loan to Ford Otosan to support the company’s plan to manufacture electric vehicles, making Turkey a major EV production and sales center in the long term, Yenigun predicted.
The Turkish government has its own project to develop and manufacture cars in the country. The first fully Turkish carmaker, TOGG — a consortium of Turkish industry giants — has announced plans to shell out 22 billion Turkish lira (around $2.4 billion) in 13 years to manufacture 175,000 units of five EV models a year. TOGG CEO Gurcan Karakas said the company will start producing and selling vehicles in the second half of 2022 and begin exporting to Europe in 2024, with the first shipment bound for Germany.
TOGG will partner with Chinese battery maker Farasis Energy to produce lithium-ion batteries.
One hurdle for TOGG will be its near nonexistent brand recognition in overseas markets. Another will be Turkey’s weak EV infrastructure, including no charging network.
In 2020, barely 800 electric vehicles were sold in Turkey. The government raised the consumption tax on EVs to between 10% and 60% from the current 3% to 15% in February 2021, a move that could hinder adoption of electrics, experts point out.