I’m currently traveling in Turkey, and even though I’m only a few days away from vacation and I’m spending my time chasing Istanbul’s street cats outside, I’m a journalist. I can’t pay attention to the technology news around me. And 2023 is indeed a big year for Turkey, but not only because it is the 100-year anniversary of the republic, there is a major election coming up. In the technology sector, this is the year when the country started exporting the first domestic electric car, a sign of the coming economic growth.
In the year In 2018, five of Turkey’s most influential companies created TOG, the country’s first electric-vehicle manufacturer. After a few rounds of delays, the EVs made by Tog are expected to finally be on the market this year, and they already seem very popular: just last week, the company completed a lottery drawing that selected 20,000 people for the first set of owners from about 180,000 applicants. (The first car was handed over to Turkish President Recep Tayyip Erdogan on Monday.
After I made my explanation How China built its world-leading EV industry.I see many similarities between the path China took and the path Turkey is taking now. Both countries are automotive manufacturing powerhouses, but they are not content to remain at the bottom end of the auto supply chain. EVs offer an opportunity to enter a new and rapidly growing market, disrupting the traditional automotive industry and becoming an important part of the global energy transition. The difference is that China has already entered the EV race a few rounds while Turkey has just entered.
But there are more material connections between the two countries. Starting an EV business from scratch is hard; The most important part of an EV is making the batteries more difficult. This is why Turkey is not going it alone and instead partnering with Farasis, one of China’s leading battery companies, behind industry leaders such as CATL, BYD and CALB. In the year In 2019, Tog and Farasis formed a joint venture company, Syro, each taking a 50% stake, to build a battery factory in Gebze, Turkey that will produce the lithium-ion batteries that power Tog’s electric cars.
Farasis is not the only Chinese technology company to make it to Turkey. In January, a Turkish newspaper reported that Alibaba plans to invest more than $1 billion to build a data center and logistics center in Turkey. Alibaba owns Turkey’s largest e-commerce company, Trendiol, and its overseas shopping app, Ali Express, is the most downloaded free app in Turkey’s Google Play Store. The Wall Street Journal reported in December that Shin, another important Chinese player in the fast fashion industry, has started manufacturing in Turkey after only producing in China for a decade.
Considering that Turkey has always had close economic relations with China, it is not surprising that these companies chose Turkey. It plays a strong role in Beijing’s Belt and Road Initiative, and this role was strengthened after the start of the Russian-Ukrainian war, which made rail logistics reliable on the Russian side.
But Turkey is important because it sits at the intersection of Europe and Asia and can be an entry point for Chinese technology companies looking to enter the European market.
The EV industry is a good example of this. Chinese battery companies have faced resistance when trying to enter the US. For example, when Chinese battery giant CATL struck a deal with Ford in February to make EV batteries in Michigan, Senator Marco Rubio immediately asked the Committee on Foreign Investment in America to review the deal and sought to block EV companies from accepting it. Tax credit if you use Chinese technologies.