Javohir Boliyev
Let’s consider that countries around the world are trying to shift towards a green economy through the widespread adoption of electric vehicles, whereas affordable and high-quality vehicles have been sitting idle in your warehouse, gathering dust. Does it sound concerning? No, this is the economic reality facing Turkey’s automobile market today.
Over the past few years, the country’s car market has grown at an alarming rate. The figures also confirm this: in 2023, more than 60.000 EVs were sold in Turkey – an 867% increase compared with the previous year. Despite this trend, rather than leaving the market to the forces of free trade, the Turkish government decided to deploy a powerful economic weapon.
Turkey’s Ministry of Trade issued a decree in November 2023, effective December 29, requiring EV importers to obtain a permit conditional on independently building at least 20 service stations across the country’s seven regions, staffing a 40-person Turkish-language call center, and keeping a resident representative — with imports from the EU and FTA partners exempt. Now, is it really intended to protect consumer safety, or is it a hidden protectionist policy?
How should this be assessed? Such arguments are not without merit. New technology – high-voltage batteries, may indeed be dangerous if they are serviced inappropriately. Therefore, the service and technical requirements are reasonable. Moreover, it is only natural that the Turkish government intended of encourage foreign investors to invest in domestic infrastructure rather than merely export finished products – it is quite a common tool used by most developing countries. Eventually, temporarily protecting infant industries from relatively cheaper and qualified imports – a practice widely observed throughout economic history- is sometimes a justified approach.
However, this is where the ambiguity begins. The first question – why importer must build their own service stations when contracting with existing local service networks could build the same project. This requirement raises the costs of market entry, not safety. In economic theory, it is often regarded as a classic artificial barrier to market entry, making it nearly impossible for small and medium-sized importers to comply and leaving the market to only the largest players, ultimately reducing competition.
Additionally, importers are given only 13 days to adhere to the requirements. As it is cited by Kağan Dağtekin, the importer of MG brand cars, it is technically impossible to construct the new service center during 13 days in 7 regions. This mismatch between the requirements and given timeframe is no longer a safety policy, it is a clear mechanism to force certain players to exit the market.
Between January and October 2023, China sold $184 million worth of electric vehicles to Turkey, nearly double the total for all of 2022. Those imports were already facing a 40% additional duty on top of the standard 10% (50% total). So prices were already inflated, and the market was still growing fast.
This new administrative layer doesn’t work through price, it works through an outright quota-like block. And that’s an important distinction: a tariff still leaves room for competition, a foreign producer can cut its price and stay in the market despite the duty.
A quantitative or administrative barrier closes that door entirely, no matter how cheap or good the product is, a company that can’t meet the requirement and simply can’t enter. The result is a shrinking of consumer choice and further price increases (a classic deadweight loss).
Finally, this problem is also crucial in terms of trade law. The new requirements do not apply to EU countries and countries that have free trade agreements with Turkey. Differentiating based on the country of origin contradicts the core logic of the Most-Favoured-Nation (MFN), and such practice often becomes the beginning of trade disputes. It forms the core of China’s main complaint brought before the international court: the additional 40% tariff imposed on electric vehicles applies only to cars imported from China, while identical vehicles from other WTO member countries are either completely exempt from this tariff or subject to lower rates.
Consumer safety and supporting local industry are reasonable goals on their own. But 13 days deadline, a requirement that importers build their own 20 stations, and an exemption drawn along country lines show a gap between the stated purpose and the actual tool.
The numbers make it plain, smalling an administrative wall on a fast-growing, price-sensitive market segment isn’t a safety policy. It’s a policy for making that segment disappear.
Javohir Boliyev is a BSc student majoring in International Economics and Management at UWED. His academic background includes advanced training certificates with UNCTAD, ADBI, and HSE ICEF. He is dedicated to mastering data-driven economics.
