Turkey Launches Its First Homegrown Automotive Company & It’s Electric!
Turkey has established itself as a global automotive manufacturing powerhouse and in 2017, Turkey’s President Erdoğan sought to capitalize on that capability by launching a domestic electric vehicle company. A coalition of 5 Turkish companies rallied around the idea, and in 2019, the first two concept vehicles were unveiled.
Disclaimer: Travel and accommodations for the author were paid for by Invest in Turkiye as part of an automotive media tour.
We visited Togg’s headquarters on an automotive media tour through Turkey and had the opportunity to sit down with the leadership team and gawk at some of their beautiful, fully electric concept vehicles. The brand had its big coming out party at CES in Las Vegas in January this year and was still riding on the coattails of the buzz when we visited.
To garner the interest of the masses, electric vehicles must be desirable. They cannot simply be cheaper to operate because outside of the fleet world, most people don’t pay too much attention to the total cost. These new vehicles need to pack in more technology, beautiful designs, more convenience, cutting edge technology, and a lower cost of operation to really stick in the minds of prospective buyers.
Togg turned to legendary designer Murat Günak to ensure the new vehicles had looks to die for that delivered both form and function. By all measures, Günak delivered on the challenge of building a car that will be accepted by mainstream customers while calling them into the future at the same time. They look modern, but with touches like a smooth front where the grill would typically be that subtly identify them as electric vehicles.
The early prototypes set Togg apart, locking in a win in the Professional Concept category in the iF Design Awards in 2021. As early prototypes, they will surely see further revisions as the move towards production, but starting with beautiful designs is a huge step in the right direction to get investors, prospective customers, and the internal teams at Togg excited about the future of the company.
It is clearly early days for the company but that is all about to change as its first factory is under construction just a few miles from where we were. The factory is being built on land provided by the government as part of a stimulus package to help the new company get up and running. In addition, the upstart worked with the Turkish government on a supplemental incentive package to help get the massive initiative off the ground.
In addition to the land allocation, the Turkish government committed to purchasing 30,000 vehicles from Togg over a 10 year period. The government also provided a lengthy list of financial incentives including:
- A VAT exemption
- Customs duty exemption
- VAT refund
- Corporate income tax reduction
- Social security premium employer’s share support for 10 years
- Income tax withholding support for 10 years
- Qualified personnel support (up to $24M USD)
- Interest rate support
Even in the best of times, starting up a new electric vehicle company is a daunting undertaking. The challenge is further complicated when building said business on top of a supply chain shaken by a global pandemic in parallel to a dozen other companies competing for battery cell supply.
To mitigate the impact of potential supply chain issues, Togg is launching a 50/50 joint venture with Chinese cell producer Farasis to build cells in Turkey. The new battery cell production facility will be built in the Turkish capital of Ankara where imported battery cells from Farsis will be built up into modules and packs for Togg.
Initially, the new battery plant will assemble imported NMC pouch cells into modules and packs, but the long term plan is to produce cells locally. Togg’s battery modules and packs were designed in partnership with Farasis for a more seamless integration into the vehicles. Like many skateboard-based electric vehicle designs, Togg designed their unit with flexibility in mind. Smaller vehicles will use a skateboard with 2 modules in parallel (2P architecture), with a larger pack with 3 modules in parallel (3P) option for larger vehicles.
Farasis is an established player in the electric vehicle battery cell supply game, with a strategic partnership with Mercedes to supply the batteries for the EQC. Mercedes similarly pushed beyond simply purchasing cells, taking an equity stake in Farasis.
There is a strong case for electric vehicles in Turkey, where the price of gasoline in March hovered around $5.75 USD/gallon during our visit. That puts a 10 gallon, 300 mile range tank of gasoline at $57.50 USD. Electricity, on the other hand, is just $0.09 USD per kWh, or $7.92 USD for a full 88 kWh, 300 mile range charge on a large pack EV. This isn’t just cheap coal-fired electricity, either.
44% of Turkey’s electricity in 2019 was produced from renewable sources and installations of wind, solar, biomass, hydro and geothermal have only continued to ramp up. Today, 98% of Turkey’s transportation is powered by largely imported oil. Paired with increases in renewables, electric vehicles could be the key for Turkey to break the shackles of its traditionally Russian oil and gas import-based energy mix.
Togg has a lot going for it. It has the strength of the world’s 14 largest vehicle producing country behind it. That capability comes with a nation full of automotive parts suppliers, workers, and logistics support. It has government support from the President on down and has a laundry list of incentives to keep it afloat through the first decade.
The vehicles themselves are beautiful and construction on the factory slated to build them is already underway. As we have seen with every other electric vehicle brought to market whether from an established OEM or an upstart, there will surely be challenges as the team moves forward into production. With its broad base of support in Turkey, Togg seems to be better positioned than most to succeed.
Time will tell whether Togg is successful and we will eagerly be waiting and watching to see what comes from this massive new Turkish upstart.
Get all the details about Togg from the official website.
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