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Key Insights
Türkiye has significantly increased the Special Consumption Tax (SCT) on electric vehicles, raising the lowest rate from 10% to 25%.
This tax hike has led to substantial price increases for top-selling EV models, including the domestic Togg T10X and Tesla Model Y.
The change erodes the competitive advantage previously enjoyed by EVs, making them less competitive against internal combustion engine vehicles.
Industry executives view the revised rates as potentially beneficial for domestic production, despite initial price increases, anticipating falling interest rates to offset some impact.
Türkiye’s electric vehicle (EV) market is undergoing a dramatic transformation following a recent tax overhaul that significantly raised the Special Consumption Tax (SCT) rate. The lowest SCT rate for EVs has increased from 10 percent to 25 percent, a move that has immediately triggered substantial price hikes across many top-selling models, pushing some EV prices close to 2.5 million Turkish Liras (approximately $76,000).
Among the most affected models is the domestically produced Togg T10X, which saw its price jump by 29 percent to 2.36 million liras. Tesla’s Model Y followed with a 20 percent increase, now selling for 2.24 million liras. Other prominent brands such as Kia, MINI, BYD, and Citroën have also revised their prices upward, with BYD’s Seal U model experiencing a nearly 25 percent rise. This widespread increase directly impacts consumer affordability and the competitive positioning of EVs in the Turkish automotive market.
Electric vehicles had previously enjoyed a considerable competitive edge due to these favorable tax rates, a factor that contributed to their capturing a notable 27.4 percent of the market share in June. This advantage is now eroding, making it increasingly challenging for EVs to compete on price with their internal combustion engine (ICE) counterparts, which are not subject to the same magnitude of tax adjustments.
Despite the immediate price increases and market adjustments, Automotive Industry Association (OSD) Chairman Cengiz Eroldu offered a nuanced perspective. He described the revised tax rates and updated price thresholds as a positive development from an industrial standpoint, emphasizing their potential to enhance the competitiveness of domestic production. “This step relatively enhances the competitiveness of domestic production while also partially supporting vehicle accessibility. The negative impact of higher tax rates will be somewhat offset by falling interest rates,” Eroldu stated. He underscored that sustainable growth in the domestic market and an increase in the share of locally manufactured vehicles are critical for maintaining production volume and investment continuity, suggesting a long-term strategic benefit for local industry players.