Turkish officials anticipate an agreement with Chinese EV and battery maker BYD to build a $1bn plant near Izmir in the west of the country, Automotive News Europe reports.

Recep Tayyip Erdogan, the president of Turkey, is expected to announce the deal during a ceremony in Manisa province, on the Mediterranean coast of Anatolian Turkey, where the plant would be built.

If it goes ahead, the factory would allow BYD to sidestep EU tariffs on Chinese EVs.

Coming into force on Thursday, they increase import duties on certain vehicles by almost 38%.

However, Turkey is in a customs union with Europe, and EVs made there would not be able to move freely through the single market.

At present, BYD pays a 10% duty on its exports to the EU.

BYD is also building a factory in Szeged, Hungary. Other plants are under way in South America and Southeast Asia.

The Shenzhen company has said it hopes to offer the Seagull hatchback to European drivers for less than €20,000.

By contrast, Turkey has said it was dropping plans to impose an additional 40% tariff on all vehicles from China with the aim of encouraging Chinese investment.

That decision followed talks between President Erdogan and Xi Jinping during last week’s meeting of the Shanghai Cooperation Organisation in Astana, Kazakhstan.

BYD has pioneered ultra-automated production and vertical integration to become the world’s largest EV maker. Its sales increased to a record 982,747 vehicles in the second quarter of this, a year-on-year rise of 40%.

However, it only sold 12,944 in Europe in the first five months, although it was a sharp increase from the 2,120 it sold in the same period in 2023.