President Erdogan Invites Elon Musk to Establish Tesla Factory in Turkey.
Turkish President Recep Tayyip Erdogan invited Elon Musk to establish a new Tesla factory in Turkey during their meeting in New York. This encounter took place as Erdogan attended the United Nations General Assembly, with the discussion taking place at the Turkish House in Manhattan.
The Turkish state news agency Anadolu reported that Erdogan emphasized Tesla’s presence in the Turkish market, particularly with introducing the Turkish electric car, Togg. Erdogan’s call to Tesla was to consider Turkey as the location for its seventh factory.
Moreover, Erdogan explored potential collaboration opportunities between Musk’s aerospace firm, SpaceX, and Turkey’s space program. He also invited Musk to participate in Teknofest, Turkey’s renowned aviation, aerospace, and technology festival held from late September to October.
Musk responded positively, noting that several Turkish suppliers already work with Tesla. He described Turkey as a strong contender for his next factory location, emphasizing the country’s potential.
Tesla currently operates six factories worldwide and is in the process of constructing a seventh in Mexico. Musk had previously mentioned his intention to choose a new factory location by the end of the year. Additionally, he had engaged in discussions with Indian officials about establishing a manufacturing facility for cost-effective electric vehicles in India.
While Tesla remained silent in response to CNBC’s request for comment, the company’s stock price has seen a remarkable 123% increase year-to-date.
During their meeting, Erdogan and Musk also delved into areas of cooperation involving artificial intelligence and Starlink, SpaceX’s satellite internet service.
Musk expressed interest in securing the necessary licenses from the Turkish government to launch Starlink in Turkey, a country with a population of 85 million.
President Erdogan’s invitation to Elon Musk to establish a Tesla factory in Turkey, discussions on aerospace collaboration, Teknofest participation, and the potential introduction of Starlink, showcases the growing ties between Turkey and Musk’s enterprises.
Turkey has emerged as a significant manufacturing powerhouse, strategically positioned at the crossroads of Europe and Asia over the past few decades. This transformation is evident in the country’s robust manufacturing sector, which has grown substantially.
Between 2012 and 2022, manufacturing’s contribution to Turkey’s GDP increased to approximately 19%. The nation has set ambitious goals, aiming to raise this figure to 21% by the end of the year as part of its 2023 Industry and Technology Strategy, as reported by the U.S. Department of Commerce.
This strategy encompasses various elements, including state support for entrepreneurs, reinforced intellectual property laws, and substantial investments in STEM education and technology startups.
Of Turkey’s manufacturing exports, 36% constitute medium-tech products, with only 3% being high-tech products. Turkey’s target is to boost the proportion of medium-tech exports to 44% and high-tech products to 6% by the close of 2023.
Turkey has garnered recognition, particularly in defence technology. In 2022, the country achieved a record $4.4 billion in arms exports, surpassing the annual defence budgets of several European countries. The Turkish government aims to further increase this figure to $6 billion in 2023.
The overall turnover for Turkey’s defense industry reached $10 billion in the previous year, with approximately 2,000 companies operating in the sector. Notably, the locally-produced Bayraktar TB2 drone gained international acclaim after being used by Ukrainian forces against invading Russian troops.
During his conversation with Elon Musk, President Erdogan highlighted the global success of the Bayraktar TB2 drone, to which Musk expressed awareness of its popularity.
Turkey’s broader manufacturing sector plans to invest between $1 to $1.5 billion annually in integrating Industry 4.0 solutions, referring to the digital transformation across manufacturing industries, according to the U.S. Commerce Department.
Despite its manufacturing successes, Turkey’s economy has faced challenges in recent years. A combination of shrinking foreign currency reserves and President Erdogan’s reluctance to raise interest rates during a period of rapid growth has weakened the country’s currency and led to high inflation.
Although the country’s central bank has taken steps to reverse this trend by gradually increasing interest rates, the Turkish lira remains down 30% against the U.S. dollar year-to-date. It has depreciated by 78% over the past five years.
In response, President Erdogan has been actively seeking foreign investment through engagements with business leaders like Elon Musk and trade and investment agreements with wealthy Gulf Arab states. These efforts are part of a broader strategy to stabilize Turkey’s financial situation and revitalize its economy.
