In June 2026, Chinese electric-vehicle manufacturer BYD confirmed that its planned $1 billion electric and plug-in hybrid vehicle factory in Manisa, western Turkiye, had been placed on indefinite hold. The project, signed with great ceremony in July 2024 in the presence of Turkish President Recep Tayyip Erdoğan, had been presented as a landmark investment. It promised annual production capacity of 150,000 vehicles, up to 5,000 jobs, a research and development center, and production by the end of 2026. Nearly two years later, construction had not begun and no foundation had been laid. BYD Executive Vice President Stella Li said the Turkish project had no timeline and that the company’s priority was its facility in Szeged, Hungary.

The decision left Ankara politically exposed. Turkiye had granted BYD substantial import-tax exemptions, allowing the company to sell tens of thousands of vehicles and generate hundreds of millions of dollars in additional profits.

The decision left Ankara politically exposed. Turkiye had granted BYD substantial import-tax exemptions, allowing the company to sell tens of thousands of vehicles and generate hundreds of millions of dollars in additional profits.

Following the setback, Beijing intensified its media and diplomatic outreach in Turkiye to repair China’s damaged image and protect the broader bilateral relationship.

The Collapse of the Manisa Project

The Manisa investment was conceived as a mutually beneficial arrangement. For Turkiye, it offered an opportunity to become a regional electric-vehicle manufacturing hub and attract the first major new foreign automotive brand since the late 1990s. For BYD, it provided a potential production base that could take advantage of Turkiye’s Customs Union with the European Union and soften the impact of higher EU tariffs on Chinese-made electric vehicles. The factory was therefore more than a standalone industrial project: it was expected to anchor a wider supply chain, strengthen Turkiye’s export position, and demonstrate Ankara’s ability to attract high-value Chinese manufacturing. In practice, however, the arrangement unraveled. 

By early 2026, Turkish authorities had suspended the tax exemptions granted to BYD because of the lack of progress. Ministry of Industry and Technology officials maintained that the investment agreement, including its conditions, obligations, and guarantees, remained legally valid. They also warned that BYD could be required to repay the incentives if it failed to complete the project.

Parliamentary scrutiny intensified, with opposition lawmakers emphasizing that “not a single shovel had hit the ground.” Stalled construction, suspended fiscal........

© Middle East Monitor