BYD, China's electric vehicle behemoth, has reached a one-billion-dollar agreement with Turkey to open a plant in the nation, allowing it to avoid new EU tariffs. President Recep Tayyip Erdogan oversaw the signing ceremony in Istanbul between BYD CEO Wang Chuanfu and Turkish industry and technology minister Fatih Kacir.

According to the Turkish industry and technology ministry, BYD plans to open a production facility with an annual capacity of 150,000 vehicles, as well as a research and development center. The plant will directly employ 5,000 people.

The revelation comes just days after the European Union imposed further interim tariffs of up to 38% on Chinese EVs following an assessment that found state subsidies were unjustly harming European companies. Turkish-made automobiles have preferential access to the EU and customs union that dates back to 1995, and the Marmara region around Istanbul has emerged as one of the world's major automobile manufacturing hubs.

Major automakers such as Fiat and Renault established operations there in the early 1970s, followed by Ford, Toyota, and Hyundai, capitalizing on Turkey's strategic location at the crossroads of Europe, Asia, and the Middle East.