Manufacturing

Hyundai Motor Invests $65 Million in Turkish EV Battery Plant

June 18, 2026

South Korea’s Hyundai Motor Company has announced a significant €55 million (approximately $65 million) investment to establish a battery plant in Turkey, a strategic move poised to bolster its electric vehicle (EV) production capabilities in the region. This investment, revealed on June 17, 2026, is part of a broader €715 million (approximately $830 million) EV program in Turkey, underscoring the country’s growing importance as an automotive manufacturing hub, particularly for the burgeoning electric mobility sector. The new facility is expected to commence mass production of EV power packs in conjunction with the launch of the Ioniq 3 EV at Hyundai’s Izmit factory in August 2026, marking a pivotal step in Hyundai’s global electrification strategy and Turkey’s ambition to become a regional EV powerhouse.

Hyundai’s Strategic Deepening in Turkey’s EV Landscape

Hyundai Motor’s decision to invest in a battery plant in Turkey reflects a strategic deepening of its commitment to the Turkish market and its broader European electrification goals. The Izmit factory, Hyundai’s first overseas plant established in 1997, has a long history of production, having manufactured 3.3 million vehicles since its inception and boasting an annual capacity of approximately 245,000 units. The new 30,000-square-meter battery facility will initially create over 300 jobs and utilize 27 robots and automated systems for assembling EV power packs, in cooperation with Hyundai Mobis.

This investment is crucial as Hyundai aims to produce 27,000 Ioniq 3 units this year, increasing to over 40,000 in 2027. The Ioniq 3, built on Hyundai’s Electric Global Modular Platform (E-GMP), will be the company’s second locally produced electric vehicle in Turkey, following previous plans to launch EV production at the Izmit plant in 2026. Hyundai Motor Turkey General Manager Murat Berkel highlighted the significance of the investment for both the country and the Turkish automotive industry, emphasizing its contribution to the brand’s growth in Turkey. The company plans to source nickel manganese cobalt (NMC) battery cells from Hungary and lithium iron phosphate (LFP) cells for shorter-range variants from China, allowing for diverse battery configurations for the Ioniq 3.

Globally, Hyundai Motor has set an ambitious target to invest $90 billion worldwide by 2030, pursuing the production of 21 fully electric and 13 hybrid models. The company aims to boost annual global battery electric vehicle (BEV) sales to 1.87 million units and secure a 7% global market share by 2030, reinforcing its electrification strategy with plans to introduce 17 BEV models by the same year. This includes expanding BEV manufacturing bases beyond Korea and the Czech Republic, with Turkey now playing a more integral role.

Turkey’s Accelerating EV and Battery Ecosystem

Turkey has been actively positioning itself as a regional hub for EV production and supply, linking battery manufacturing, component exports, and electrification. The government, in cooperation with car manufacturers and suppliers, aims to strengthen the international competitiveness of its automotive industry and strategically attract foreign investors to the e-mobility sector. This ambition is supported by a multi-faceted strategy, including policy support and substantial investment in domestic manufacturing capacity, with $5 billion earmarked for EV production and $4.5 billion for battery manufacturing initiatives.

The domestic electric vehicle brand, TOGG, has been central to Turkey’s EV strategy. TOGG began production of its T10X SUV in 2023 and sold nearly 30,093 units in 2024, with 17,101 units sold in the first half of 2025 alone. By January 2026, TOGG had surpassed 100,000 deliveries since its launch and aims to produce 60,000 units or more in 2026, with an annual production capacity target of 100,000 units by the end of 2027, eventually reaching 175,000 vehicles per year at its Gemlik factory. The SIRO joint venture, a partnership between TOGG and Farasis, began battery-module and pack production in Gemlik in 2023, with an annual capacity of 3 GWh, aiming for 20 GWh by 2031.

Beyond TOGG, other major automakers are also investing heavily. Ford Otosan, a joint venture between Ford and Koç Holding, announced a record €2 billion investment to produce electric commercial vehicles and batteries at its Kocaeli plant, aiming to make it the first and only integrated electric vehicle production center that also produces car batteries in Turkey. This plant is expected to produce 210,000 commercial EVs and 130,000 batteries annually. In February 2023, Ford, LG Energy Solution, and Koç Holding signed a non-binding Memorandum of Understanding to form a joint venture for a commercial EV battery cell facility near Ankara, with production intended to start in 2026 and an annual capacity of at least 25 GWh, potentially expanding to 45 GWh.

Chinese EV manufacturers are also entering the Turkish market. In July 2024, the Turkish government reached an agreement with BYD (Build Your Dreams) to develop a production facility in Manisa, with a planned investment of $1 billion for an EV plant and R&D center capable of 150,000 vehicles per year, expected to open in 2026. However, recent reports indicate that Turkey has suspended BYD’s tax exemptions over stalled factory plans, highlighting potential challenges in these partnerships. Other Chinese players like Speedy Working Motors (SWM Motors) and Chery are also exploring or negotiating production facilities in Turkey.

The Turkish automotive industry, which ranked 12th worldwide among passenger car producers and 4th in Europe in 2024, benefits from a robust supplier network of around 1,100 component manufacturers. This ecosystem allows for high levels of localization, cost efficiency, and production flexibility, supporting both traditional internal combustion engine vehicles and the transition to EVs.

Turkey maintains an open foreign direct investment (FDI) regime, guaranteeing equal treatment for foreign investors under its 2003 FDI Law. The “Türkiye International Direct Investment Strategy (2024-2028),” published in 2024 and still in force, guides national investment policy, prioritizing technology, digitalization, and green transformation. This strategy aims to raise Turkey’s share of global FDI inflows from 0.85% to 1.5% by 2028 and attract 12% of FDI inflows to the Central and Eastern Europe, Middle East, and North Africa (CEEMENA) regions by the same year.

In 2025, Turkey attracted $13.1 billion in FDI, a 12.2% year-on-year increase, outperforming global trends where investment flows remained subdued. FDI inflows, excluding real estate, reached $10.7 billion in 2025, the highest level in a decade, according to Treasury and Finance Minister Mehmet Şimşek. The manufacturing sector, including automotive, accounted for 31% of total FDI inflows in 2025, attracting $3.020 million.

The Turkish government offers various incentives to attract high-tech and strategic investments. The Project-Based Investment Incentive Scheme provides tax breaks, customs relief, and land support for major EV and battery projects. The “HIT-30 High Technology Investment Program,” a $30 billion initiative, specifically targets sectors like electric vehicles, batteries, and semiconductors, requiring a minimum investment of 2 billion Turkish Lira and offering comprehensive benefits including corporate tax reductions, interest support, and land allocation. The Ministry of Industry and Technology, led by Mehmet Fatih Kacır, has emphasized continued negotiations with investors for new investments, particularly in the automotive supply industry and battery production, throughout 2025.

Economic Context and Investor Confidence

While Turkey presents a compelling investment case, particularly in strategic sectors like automotive and EV manufacturing, international investors closely monitor its macroeconomic stability. In 2024, Turkey’s GDP grew by 3.2%, with inflation averaging 60%, and the Turkish Lira depreciating by 20% against the dollar. The Central Bank of the Republic of Turkey (CBRT) raised its policy interest rate from 15% to 50% between June 2023 and March 2024 to combat high inflation.

However, the economic outlook for 2026 appears more balanced and predictable. Inflation is expected to decline to 23.9% in 2026 from 30.9% in 2025, supported by positive real interest rates and fiscal discipline. The International Monetary Fund (IMF) forecasts GDP growth at 4.1% in 2025 and 4.2% in 2026, with inflation expected to reach 23% by end-2026. The CBRT is projected to implement gradual rate cuts, ending the policy rate at around 30%, while maintaining a cautious stance. FX stability remains a priority, backed by strong reserves, with the USD/TL forecasted at approximately 52.

Despite these positive projections, the economy remains exposed to structural weaknesses, high current account deficits, and reconstruction costs from the 2023 earthquakes. Opaque rulemaking and legislative processes also added risks for investors in 2024. Nevertheless, Turkey’s strategic location, large domestic market, favorable demographics, skilled workforce, and customs union agreement with the European Union continue to positively influence its investment climate.

Geopolitical Positioning and Supply Chain Resilience

Turkey’s geopolitical position at the crossroads of Europe and Asia makes it a strategic location for automotive production and a crucial link in global supply chains. The customs union agreement with the EU allows tariff-free access to European markets for vehicles and components produced in Turkey, making it a competitive nearshore manufacturing base, especially as companies seek to reduce logistics risks and costs.

This strategic advantage is particularly relevant in the context of global supply chain diversification and resilience. The German-French group Forvia, the world’s seventh-largest automotive supplier, plans to establish a supply factory in Turkey to compensate for declining orders from European vehicle manufacturers and promote the integration of Chinese suppliers into alternative supply chains. Turkey’s well-developed infrastructure, including train lines, sea and air ports, and highways, further facilitates the transportation and export of products.

The shift towards electrification also positions Turkey as a vital player in the green transformation of the automotive industry. The country’s efforts to build independent industrial capabilities and develop its national EV brand, TOGG, contribute to reducing import dependence and fostering long-term economic development within the sector.

Implications for Foreign Investors

Hyundai Motor’s $65 million battery plant investment in Turkey serves as a strong signal of confidence in the country’s potential as an EV manufacturing and export hub. For international investors, this development underscores several key implications:

First, Turkey is solidifying its role as a critical node in the global automotive supply chain, particularly for electric vehicles. The combination of established manufacturing expertise, a skilled workforce, and preferential access to the EU market makes it an attractive location for OEMs and component suppliers looking to localize production and enhance supply chain resilience.

Second, the Turkish government’s proactive approach through the “Türkiye International Direct Investment Strategy (2024-2028)” and targeted incentive programs like HIT-30 demonstrates a clear commitment to attracting high-value, technology-intensive FDI, especially in green technologies and digital transformation. These incentives, including tax exemptions and land support, can significantly de-risk large-scale investments.

Third, while macroeconomic challenges such as inflation and currency volatility persist, recent policy shifts and a more predictable economic outlook for 2026, as noted by the IMF and ÜNLÜ & Co, suggest improving stability. Investors should continue to monitor these macroeconomic indicators closely, but the sustained FDI inflows in 2025 indicate a growing confidence in Turkey’s long-term potential.

Finally, the increasing number of international players, including Hyundai, Ford, and Chinese manufacturers like BYD (despite recent challenges), committing to EV and battery production in Turkey highlights the competitive landscape but also validates the market’s growth potential. Foreign investors should consider Turkey not just as an assembly base, but as a strategic location for advanced manufacturing, R&D, and a gateway to regional and European markets in the evolving era of electric mobility.

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