Turkey unveils first fully domestically-produced car in $3.7B bet on electric
reuters.com
reuters.com
- Turkey is the perfect size for a relatively beefy electric car battery to make through in one charge, effectively removing the range anxiety.
- This car will likely be immediately competitive in at least the Turkish market because Turkish taxes are crazy on transport. Gasoline is taxed at ~70%, cars are taxed at 68% (50% + 18% VAT). A domestic car will probably avoid the 50% on purchase and a domestic electric car will entirely avoid taxes on gas. Taxes make this a good deal at almost any price the average Turkish consumer can buy.
- With the current very low, out of whack exchange rate (1USD:6TRY) this will also become competitive in at least Southern European markets fairly fast as well.
- Since this is government sponsored they can also do a fairly fast rollout of electric charging stations by offering generous incentives. If that doesn’t work, they have the eminent domain hammer, and they will definitely just build it themselves as part of the electric service.
- This also avoids the heavy industry required to build ICE cars, which has environmental costs. That cause is becoming popular with the electorate as well, exemplified in the stiff backlash against the country’s first nuclear reactor.
- Lastly, Turkey has been building cars for the past 35 years and it’s gotten pretty good at it - many of the entry to mid level marques of European conglomerates are built in Turkish factories. This is an entry into luxury segment, it is not an entry into car manufacturing. That knowledge of being able to build safe and solid European cars already exists in there. If you’ve visited Europe, you likely already ridden a Turkish-made car (taxis) and if you live in Europe, chances are you might own one without knowing.
- As a bonus point, I would say the choice of an Italian designer over a Turkish one bodes well for the effort because somebody actually made a level headed, reasoned call on this and not a nationalistic one.
Not that Erdogan couldn't have such arrogant ideas, but it's not going to fly like that.
Also, I don't get that idea about Turkey being perfect size for making through its area with an electric car. Turkey is not a small country, Istanbul-Ankara is 450 km, Ankara-Gaziantep is 700 km, and that's not yet even close to "through" the country. Not that this is necessarily so relevant.
That is a significant discount on the price.
Anyway, even within western side, İstanbul — Antalya is ~700km, and İzmir — Ankara is ~600km, both over 300mi (~500km).
Also, lots of mountains.
Who would adjudicate such a dispute? The WTO can no longer hear appeals on trade disputes, because there is only one judge left. Three judges are required to hear cases.
There are normally seven judges, but the US under Bush and Obama used its power to slow down appointments to replace judges whose terms expired, and under Trump to completely stop such replacements. Earlier this month, the terms of two of the remaining three expired.
Good luck producing an entirely new car model for domestic consumption only. Even when country is as big as Turkey, it will not be able to compete in scale, because in automobile industry, scale is very important.
Like: - Government banks can provide 0 interest (5 years term) credit only for local car. - remove all taxes for 0 emission only with some spesifications like between 200-300 HP cars only to block Tesla (whatever).
Similar tricks already applying by all governments around globe.
I do not think any foreign company like Tesla will change his spec just to sell their cars in Turkey.
> I do not think any foreign company like Tesla will change his spec just to sell their cars in Turkey.
True and false.
Yes, such tricks for circumventing (sometimes outright disadvantageous and stupid) foreign trade agreements are a common thing globally.
At the same time, tuning specs to cater for local tax bands, local driving license restrictions, import taxes, or _these tricks_ is also a common thing, dating back before ECUs with physical chokes etc. And nowadays, it is a bit flip in EV's software to restrict the max output, so why not produce a local market version after a law&marketing department brainstorming and two-week R&D testing.... And nowadays, another two weeks later, instead of traditional physical/chiptuning derestriction, there is a downloadable "unathorized jailbreak" to remove that.
Mind you, cars are a 20.000+ USD things. Put on low incentive and nobody cares. Put on high enough incentive and labor-intensive things become lucrative - such as assembling the car completely, disassembling the car again, shipping parts by train, reassembling the cars and bam, local car. If you can disassemble and reassemble it cheaper than 10.000 USD import tax, you have net gain (this was really done in some parts of Europe!). And you can flip bits cheaper than 10 USD and you sell.
Might work for some countries (like banana republic) but I do not think it would be valid case for Turkey. It is not about assembling/disassembling or where the factory is. Toyota, Renault, Honda, Isuzu, Hundai, Ford already producing (yes factories planted) in Turkey but consumers pay custom tax.
They can drop "income tax" for TOGG manufacturer, while others pay income tax.
Like, Amazon, Google does not pay their taxes fully while many others pay.
We are not talking about VAT or custom, it is income tax that government takes some percentage from the profit of the TOGG. Then, TOGG can sell their cars cheaper even though there is Tax and VAT.
If they really want to make price advantage for TOGG, they will find a way to achieve their goal.
Because car industries are expecting a downturn in the coming years, this would be a strong indicator to international manufacturers for deciding where to cut production.
May be, Turkish government preparing for this.
"What if they close their factories one day" is the question in their mind?
Whatever the case is, it is a good news for everybody. I believe every country must build their own technology to compete others.
Just for a reminder of how bad it really was: at the end of the British Leyland body assembly line men with large hammers would whack the doors from below to make them close properly. Body panels were simply not made to the same standard that they are today and people didn't care that much about such stuff.
Not that your point about inherent complexity doesn't stand but having to whack body panels to make them fit just means the dies are at the end of their lives. They certainly would have fit without mechanical persuasion when the dies were new. The hood of any late 90s International S-series is a good example of this.
Note that it doesn’t really bother most people because while the defect rate is higher, the mechanics to fix those problems are cheaper as well.
A concerted effort to round up and imprison tens of thousands of people from all walks of life overnight? No.
It's almost like the coup played in Erdogans hands. I don't know what was behind the coup. It was clearly ill advised in every way. It's evidently clear Erdogan took the coup as his cue to further repress and imprison people he doesn't like.
Like the dictator he is. Unfortunately, the peoples of Turkey will pay the price.
FALSE.
I ain't defending anybody but If one try a coup he would not bombard his own home by a helicopter full of heavy guns.
All the citizens were suffering of these people who made the coup since 1990's as far as I read. They are hiring their members to critical positions like governor, judge etc and they do mobbing on others to quit, that's how they take over almost all the country.
Which ever main stream media you are following obviously managing a perception propaganda.
And those people who made the coup & escaped Turkey, doing this perception propaganda sice they have very good friends in mainstrem media like NY Times, Independent, The Guardian, german welt, etc.
You can't find those propaganda in Russia/China media, Russia found CIA ties with these terrorists who made the coup and never let them open their school in Russia.
Their schools operated over 100 countries (they were eye of the CIA according to claim) before the coup.
There is no example of this organisation in history, hard to believe but looks so true.
BTW, no opposition party member in jail as long as no ties with any terrorist organisation.
And I said since 2003. Before the coup attempt ( in 2016 ), his actions boosted turkey economy 5X. It has slipped since the coup attempt but that's to be expected. Political stability is required for economy prosperity.
> It’s not like putting 100k political opponents in prison is a boost to the economy.
What should he do with coup plotters? Throw them a parade?
In a more neutral way of phrasing it, per-person Turkish GDP PPP is now higher than Greece and closing in on Italy. (https://tradingeconomics.com/turkey/gdp-per-capita-ppp)
Without commenting on who holds it, there’s plenty of wealth there.
Besides, thos8 id a long term project, we should be considering 10-20 year trends.
That depends on how it will fare in the crash tests.
here is some more video:
https://www.youtube.com/watch?v=cLCJpE0OMfQ
https://www.youtube.com/watch?v=zv4bYn-JitA
One comment on that last video:
"The country owes $ 500 billion to the outside world. It is a bit of a dream to give 22 billion Turkish liras and establish the factory of such a car and put it into mass production. Not very convincing. Because such games are played by the government in our country for years. They issue a new domestic car before each election. Whenever we launch a new vehicle, we know that there is an early election in the near future."
Wikipedia:
https://en.wikipedia.org/wiki/TOGG
"The first two prototypes were produced in Italy by Pininfarina. The car manufacturing plant will be in Gemlik, Bursa."
The comment you’ve copied from YouTube demonstrates a lack of basic understanding of economics. Turkey’s debt load is typical of a country its size and furthermore debt itself is not a bad thing, it is a financial tool like any other. I do agree with the political aspects mentioned, however, the fact that it is also a political tool doesn’t necessarily mean it’s actually not being built.
One tell tale here is that the factor apparently does not exist yet, if they were serious about production then you'd expect the factory to be ready to go at the moment of introduction, the way other car manufacturers - even small ones - do it.
Turkey does have its problems, but this announcement is far too small to make any meaningful dent in them, so I would expect this is mostly domestic posturing for the 2023 election cycle. The earlier they can ship and sell at a reasonable price, the better it is for their election odds.
That said, the airport is getting better, and considering making a car is well within Turkey’s manufacturing capabilities, I don’t see a reason why it would be a stretch.
(I certainly wouldn’t buy one for the first 10 years though.)
That's using debt as a tool to make more money than you could have made if you didn't have access to credit to buy the house.
Or you borrow some money, build a car-factory, sell some cars, pay off the debt, and then have an income stream you couldn't have had without having access to credit to pay to build the car-factory.
You can only lend money to people (or States) you see as equals. Large scale lending essentially ties your economies together (like the US and China).
I highly recommend Debt: The First 5,000 Years by David Grabber. He does a great deep dive into the history of debt (both personal and with States). It's an amazing read.
Debt can also be a thinly disguised bribe if there’s no real expectation that it’s ever going to be paid back. That’s how most lending to extremely poor countries works. The US or other “donors” lend money to the local tyrant to support domestically unpopular policy; the local tyrant pockets a large amount, distributes some to their cronies and some goes on the titular reason for the aid and at some point in the future the debt gets written off. Then the cycle repeats. The US does not view any other states as equals. China has lent a lot of money to Sri Lanka and Cambodia among others. It does not view either as an equal.
> I highly recommend Debt: The First 5,000 Years by David Grabber. He does a great deep dive into the history of debt (both personal and with States). It's an amazing read.
It’s also riddled with factual errors, from saying Apple was founded by engineers working on their ok laptops or that the Fed isn’t part of the USG, among many, many others.
Long post on a small selection of the ways the book gets things wrong.
https://delong.typepad.com/sdj/2013/01/the-very-last-david-g...
In ten years, I’ll own it free and clear, a feat that would have been impossible if I was just flushing money down the toilet in rent.
Ditto with national debt. If I borrow a billion dollars and provide health care, education or defend the state, what value am I allowing to be created?
Almost any investment will produce a greater yield than the interest cost of the mortgage because the mortgage is secured debt. A mortgage might cost 3% while stocks can return 7-10% or more.
In this scenario, taking on the debt even though you don’t need to is financially advantageous most of the time. In this sense debt is a tool.
Debt is also a tool that lets you afford a house that you can’t buy with cash on hand but where your income is easily enough for principal + interest. What’s better: a) saving for 30 years after you start working and buying a house in cash (maybe paying higher rent that whole time?) or b) taking on a mortgage, getting your house now (as soon as it’s responsible), and paying it off over 30 years. Most people will choose the latter.
Thus debt is a tool that also allows you to buy things far sooner (in life or business) than you could afford to with cash.
There are other things that can be done with debt like borrowing against existing assets (to avoid having to liquidate the entire asset just to get a little cash) or borrowing against expected revenue streams and so on. Most of these tools permit greater economic growth than is possible without.
It's a tool for Turkey because they control their own currency, which gives them an advantage over potential European manufacturers who are tied to the Euro and have much less flexibility.
sigh
And Turkey needs higher rates. The rate has been far below the natural rate for way too long. In capital markets, you saw Turkish companies make all these crazy acquisitions (in addition, to being forced by the govt into splashy infrastructure projects in areas that supported the govt)...the bust from this will be incredible (the only leverage Turkey has is that French/German banks are neck deep in this debt). Lowering rates is just prolonging the inevitable (the majority of Turkey's corporate sector is already functionally insolvent).
That does not always imply that the Turkish Central Bank is doing it because of his reasons, but Erdogan is remarkably like Netanyahu in that he knows well what is going to work on his audience, and at that time, this did.
The biggest problem of Turkish economy is the lack of gasoline and imported cars. The country pay $20B for gasoline and 76% of the gasoline consumed for cars (remaining percentage for airline and sea vehicles). They import over 500M cars every year. Probably $30B to $40B goes to imported cars (it would be over $100B including taxes)
These issues, makes the negative trade gap in the balance sheet.
Overall, seems producing electric car will help a lot for Turkish economy, and Turkey might pay it's debt very short period by this step.
Turkey has a population of 82M, so this seems unlikely.
If they are making cars more expensive, they are improving quality of life. Less death, less pollution, less huge cost of extra traffic and roads and hospitals.
Turkey has a fantastic bus system with very comfortable buses more like airplanes (they have a host to bring tea, and have tv's in every chair).
That's assuming that they're bringing the expense of cars more in line with their true cost including negative externalities. Once they're increasing the expense beyond that, it's a net QoL decrease.
The same kind of penetration efficiency is in play when you’re trying to bootstrap a whole new infrastructure network like electric car charging stations.
US policy people were tied down to various abstract philosophical/economic ideas (and their refutations) which made comms, especially cellular services generally more expensive than other places. Coarse theory and such.
It's partly cyclical. Following the antitrust actions (Bell etc), the US had a great Telecom market. In the 90s, compared to almost any other country, US telecom service was amazing. Most other countries were highly ideological about "key industries" like telecommunications and it resulted in a mess.
In the cellular/broadband age, the situation reversed. Turkey is more of the "norm." US is the outlier.
I think the government is very functional from that aspect.
It does have a decent, modern baseline grid running at 220v (EU standard). This is more amenable to EV than US 110v, but otherwise insignificant. A nontrivial portion of the base demand is supplied by hydroelectric dams, thus renewable, some old coal plants as generators of last resort, largely being replaced by natural gas plants for environmental and efficiency reasons. A new nuclear plant is going online in the next few years in Sinop.
I don’t think load created by EVs would make a significant difference. It’s a developed country connected into the European grid, if it can’t generate it’ll buy from its neighbours and sell to its citizens at a premium.
Electric cars are an extremely simple, mature technology that is decades old. Building one isn't hard. The real trick is high volume production of high capacity lithium ion batteries, and the associated pack technology. This is why the Europeans are still massively behind Japan, Korea, and the US (Tesla) with EVs. They can't get enough cells to manufacture cars in high enough volume to be profitable, because they are simply buying them from LG Chem and Panasonic.
If Turkey isn't investing billions into battery production, then the whole endeavor is a pointless prestige project.
It was some years ago IIRC
I would also like to buy one 2.000 km battery. Where are they sold and what are they made of?
> - Lastly, Turkey has been building cars for the past 35 years and it’s gotten pretty good at it - many of the entry to mid level marques of European conglomerates are built in Turkish factories. This is an entry into luxury segment, it is not an entry into car manufacturing. That knowledge of being able to build safe and solid European cars already exists in there. If you’ve visited Europe, you likely already ridden a Turkish-made car (taxis) and if you live in Europe, chances are you might own one without knowing.
Having been working for large OEMs (Bosch/Continental - the primary components such as brakes, infotainments, sensors, etc., essentially the Legos that all "completely different" marques use to put their cars together, regardless whether being an EV/ICE/flying saucer/whatever), I cannot see how being a manufacture for a foreign car brand helps in any way in building your own car.
Have you ever been in a car factory? It is full of bio-robots. Go here, press this button, put the torque wrench on this until it makes "wrrrrr" and that's it. Yes, you save pennies on low-skilled labor to staff your factory, but you need a complete different skillset to start producing your own car. I'm not familiar with what is actually being done in Turkey, maybe they have some awesome R&D, but using an argument like "everybody has already driven a Turkey-made car" is like saying "country X can start its own space program, because major LEO launch paths go over that country, so every rocket has flown through there"...
No offense to Turkey, I'm from a (different) country where many foreign brands assemble their cars too, and it is just that, trained assemblers, not at all helpful at launching your own brand/model.
The point is that they don't design the factory, and at best they operate in the sense that they are cogs in the machine.
The presence of a car industry does help because when VW launches a plant, that jump-starts demand for some sub-components to be built domestically as well, and that opportunity tends to open the door to some domestic initiatives. But that's it. VW cars are still designed by VW, VW engineers still come at the VW plant to instruct how VW products are assembled, and once sub components or components or even the finished product is assembled then VW's logistic chain picks up again.
At best the existence of a car industry helps out by giving a nationalist leader a set of sub-components built domestically to pick and choose to assemble their domestic product,but that's far from the challenge.
Let's put it differently: look at Tesla. The US has a car industry. Was Tesla's challenge to put their cars out of the factory floor an easy one?
I was driving on 6+ lane highways that were so new, there wasn't even stripes on the roads. It is neat to understand now that they were also building the infrastructure to support these cars.
> Customers can choose from two different lithium-ion battery setups. The smaller option promises 186 miles while the larger pack should crack 300 miles per charge.
> TOGG says the rear-drive model can hit 62 miles per hour in 7.6 seconds. The dual-motor SUV will do the deed in 4.8 seconds.
So what about this switched reluctance witchcraft that apparently gives the newer Teslas a significant advantage?
Weight of a motor is not an issue for practical considerations for EVs
Tesla being able to "turn off" front motor, and lack of differential probably also adds a little bit to efficiency.
A market for political statements has always had a pretty low entrance barrier, all you need is a good PR manager.
We're seeing a similar thing in China.
Most of the companies have no chance as they're behind the ball on tech, logistics, etc.
Electric cars are easier to make than modern ICE vehicles.
That problem seems to be self-inflicted, though.
Does there even currently exist a consumer EV without a touchscreen?
And who's going to design and build an EV without a touchscreen these days?
As well complexity in design doesn’t absolutely correlate to manufacturing costs. Usually that’s dominated by labor, and extremely complex systems are designed to be made with less labor.
The biggest price components of lithium cells is cobalt oxide used in cathode plates, followed by nickel in cell chemistries using them. Both are not cheap at all, and their supply is famously unstable. Metallurgical cobalt goes at $30-40 per kilo in China, and battery grade cobalt oxide at almost the same price.
So for a 200kg battery pack, you will be paying 2000-3000$ only for the cathode material.
Second after this is plainly volumes. Tooling costs are very high. Even model 3 and BAIC EU are rather low volume by industry standards. You have to add to that that EVs don't share chassis/platform with any other high volume car, and thus can't share the bodywork tooling costs.
That seems unlikely.
However, during the early days of the space race, there was literally nothing the US could do to catch up with the Soviet Union space program. Their best hope was a former Nazi engineer.
Take that number. Subtract all women and Kurds, people who speak critically of the government. Adjust for the academics held as political prisoners and brain drained talent.
That’s your engineering base. You can’t square the engineering circle when your government is actively engaged in repressing the population.
Women in Turkey are allowed to study and participate active in the economy. Ditto with Kurds. The purges of academics were mostly in humanities.
There are a shitload of tensions between the white and black turks, between turks and kurds, erdogan is hardly the most pleasant person in the world and has lots of enemies, with the slowing economy country imploding at some point is not unthinkable, but so far the day to day life in Turkey is chugging along just fine.
As well there are notable examples of Germans who didn't build weapons "with a smile" for the Nazis, and the usage of slave labor in the war machine harmed their industrial capacity through sabotage.
And 15% of the scientists that we're fired from universities were responsible for 64% of academic citations.
Also, many ways Germany had the inferior war technology and progress: encryption. nuclear. Soviet tanks we're better. Germany didn't have long range bombers. British anti-aircraft systems were better.
And all that from a country that led the world in science and engineering before WWII.
But superior in conventional warfare at the beginning of WW2. Stukas, tanks and infanterie well (radio) coordinated.
MG42, the basemodel is still in use as MG3 today
Also later: ME262 (first jet engine), STG44 (first assault rifle), V1 and V2 (rockets)
So given the size, german wartechnology was very advanced.
But it was because this was the sole focus of the ruling nazi party: war tech.
Basic university research is about anything and mostly civilian and the nazis were no academics: they cared about war technology and "scientific" proof, that the aryans are superior. So they did not feel the loss of the fleeing jewish based intellectuals so hard.
"And all that from a country that led the world in science and engineering before WWII."
And this statement is probably more likely true before WWI.
I know Turkey had a Kurdish president as well as many kurdish senators in parliament. Some member of opposition party some members of Erdogan's party.
I know some cities have Arabic people more than Kurdish in east of Turkey.
The problem historical, needs to be closed for the sake of the citizens.
South Africa has more than 50,000,000 - still can't build coal power plants without mucking it up. So ... not sure why you think what you think.
Weapons just need to work, a consumer vehicle need to be cost effective, your 80s style Soviet radas are not going to sell at all despite relative ease of production.
Each week I tend to get so many messages on LinkedIn from engineers in Turkey that want to leave the country...
Funny thing is some of these engineers were actually very nationalistic but even they couldn’t take how the ruling party and Erdogan governs Turkey.
So yeah, personally I wouldn’t bet much money on engineers that are currently staying in Turkey.
I'm not saying that's a bad thing, but it might be a bit early to call this a "fully homemade car".
They're one of the greatest design / coachbuilding companies in automotive history. This just looks like a generic block of soap from a nameless factory.
I wonder what happened.
https://www.motor1.com/news/390097/togg-suv-sedan-concept-pi...
Turkey have healthy infrastructure to develop these kind of industry. I believe that they can afford paying top talents from all over the world to come there and boost this industry
Technology enables global supply chains. Electric cars may have fewer moving parts. The result is a "narrower" approach to integration where you can rely on others for important or critical parts.
Assuming they can make this car reliable and cheap - the makers only need to focus on marketing and selling to make it successful.
I meant vertically integrated, meaning a car company needs to control their supply chain.
Electric cars are an extremely simple, mature technology that is decades old. Building one isn't hard. The real trick is high volume production of high capacity lithium ion batteries, and the associated pack technology. This is why the Europeans are still massively behind Japan, Korea, and the US (Tesla) with EVs. They can't get enough cells to manufacture cars in high enough volume to be profitable, because they are simply buying them from LG Chem and Panasonic.
If Turkey isn't investing billions into battery production, then the whole endeavor is a pointless prestige project.
BTW, It is not new, it was some years ago IIRC.
http://devrimarabasi.com/galeri/big/siyahbeyaz/siyahbeyazdev...
http://devrimarabasi.com/galeri/big/siyahbeyaz/siyahbeyazdev...
I think the first iteration of THAT would be a huge boon to the economy.
Electric cars are much simpler then conventional combustion engine cars... no transmission needed.
I'm glad that Elon was not successful in putting a transmission in the Tesla car.