China EV giant BYD signed a deal on Monday to open a $1 billion electric-vehicle factory in Turkey, underscoring the threat to European and U.S. carmakers from low-cost Chinese rivals. BYD stock fell.
Archrival Tesla dominated EV sales in several European markets in 2023. Most of BYD's EVs are still sold in China but sales are growing outside its home market, including in Europe.
Turkey's President Recep Tayyip Erdogan attended Monday's signing ceremony, reportedly between BYD's CEO Wang Chuanfu and Turkey's industry and technology minister Fatih Kacir. The $1 billion BYD factory investment reportedly has an annual capacity of 150,000 electric cars. It also includes a research and development center.
The new automobile factory continues BYD's international expansion and boosts its presence in Europe, where it began selling EVs in 2021. It comes amid rising trade tensions between China and the West, which accuses the country of unfairly subsidizing its electric-car industry.
The new BYD plant, located in Manisa province, would allow it to avoid 40% tariffs in Turkey. It would also mark BYD's second European factory. Its first plant for the continent, in Hungary, is under construction.
Further, Turkey has a customs trade deal with the European Union. The EU last week slapped provisional tariffs on imported Chinese electric vehicles, hitting BYD with an additional 17.4% charge on top of the existing 10% rate for autos not manufactured in the EU, the South China Morning Post reported.
Warren Buffett-backed BYD and Tesla are the world's two largest makers of electric vehicles.
BYD said it was the world's top manufacturer of electric vehicles, including gas-electric hybrids, in 2023 and 2022.
BYD Stock Eyes Buy Point
Shares of BYD stock fell 0.9% to 29.76 on the stock market today.
BYD stock is holding above a rising 50-day moving average as it climbs the right side of an extended consolidation. It trades less than 4% below a 30.84 handle buy point.
Tesla stock pared gains to 0.6% on Monday, but extended last week's rally above the 200-day line.
In China, BYD continued its EV sales tear in the second quarter. Last Thursday, the company opened its first EV plant in Southeast Asia, in Thailand. BYD has taken over a former Ford Motor factory in Brazil. It's said to be eyeing a factory location in Mexico.
It plans to sell cheap EVs in Europe, including the Seagull for an estimated 20,000 euros ($21,668).
Ford stock popped 1.2% on Monday. Ford last week reported rising second-quarter U.S. sales, including a 61% surge for EVs.
