In major news on Hong Kong stocks, BYD Co. Limited (HK:1211) has secured a $1 billion deal from the Turkish government to build an electric vehicle (EV) factory in Turkey to boost its European production output. The factory will specialize in EVs and plug-in hybrid vehicles, with an annual production capacity of 150,000 units. The production will start by the end of 2026 and is also expected to create around 5,000 jobs.
BYD shares have gained 14% as of writing.
BYD’s European Ambitions
The Turkey factory marks BYD’s second European production hub, following its under-construction factory in Hungary. The company stated that Turkey offers advantages like a solid technology ecosystem, robust suppliers, crucial location, and workforce, which will help the company enhance its local production and logistics capabilities.
Additionally, this agreement could facilitate access for BYD to European markets, leveraging Turkey’s customs union with the EU. Recently, the EU imposed an additional tariff of 17.4% on BYD’s models manufactured in China on top of the existing 10% duty.
UBS analysts expected local production in Europe as a potential outcome of EU tariffs. UBS also added that cars manufactured in Eastern Europe by Chinese companies have a cost advantage of approximately 25% over vehicles produced by major European rivals.
In addition to Europe, BYD is focused on expanding its presence in the Southeast Asian market. The company recently opened its first EV factory in Thailand to capitalize on the rapidly growing demand for electric vehicles in the region.
Is BYD a Good Stock to Buy Now?
According to TipRanks, 1211 stock has received a Strong Buy consensus rating, backed by eight Buy recommendations. The BYD Co. share price target is about HK$302, which implies an upside of 30% from the current trading level.
