- Erdogan met with the CEO of Tesla and SpaceX in New York during his visit to the United States for the United Nations General Assembly.
- Turkey has long been a manufacturing powerhouse for international companies.
- Musk’s next Tesla factory would be the electric vehicle maker’s seventh.
Elon Musk, CEO of Tesla and owner of X, arrives for the inaugural AI Insight Forum at the Russell Building on Capitol Hill, Wednesday, September 13, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images
Turkish President Recep Tayyip Erdogan has invited Elon Musk to build his next Tesla factory in Turkey, the country’s state media reported Monday.
Erdogan met with the CEO of Tesla and SpaceX in New York on Sunday while visiting the United States for the United Nations General Assembly. The two met at the Turkish House in Manhattan.
“Recalling that with the arrival of the Turkish electric car Togg on the roads of Turkey, Tesla entered the Turkish market, Erdogan called on Tesla to establish its seventh factory in Turkey,” the official Turkish news agency reported Anadolu, citing the country’s communications directorate.
Erdogan also proposed collaboration opportunities with Musk’s aerospace company, SpaceX, and the Turkish space program, and invited the billionaire inventor to Teknofest, Turkey’s largest aviation, aerospace and technology festival that will take place between the end of September and the end of October this year.
Musk responded that a number of Turkish suppliers are already working with Tesla and that Turkey “is among the most important candidates” for its next factory, Anadolu wrote. CNBC contacted Turkey’s communications directorate for the full statement.
Aerial view of Tesla’s Shanghai Gigafactory on the outskirts of Shanghai, China, July 2021.
VCG | Visual Group China | Getty Images
Tesla has six factories and is currently building a seventh in Mexico. In May, Musk said he would most likely choose a destination for a new factory by the end of the year. He has reportedly already discussed with Indian government officials the opening of a low-cost electric vehicle manufacturing plant in India.
Tesla did not immediately respond to a request for comment from CNBC. The company’s stock price is up 123% year to date.
Erdogan and Musk also reportedly discussed cooperation in artificial intelligence and Starlink, SpaceX’s satellite internet service. Musk has reportedly expressed interest in obtaining the necessary license from the Turkish government to operate Starlink in the country of 85 million people.
Turkey has positioned itself in recent decades as a major manufacturing hub at the crossroads of Europe and Asia.
Between 2012 and 2022, the share of manufacturing in Turkey’s GDP increased to around 19%, and the country aims to increase this figure to 21% by the end of this year as part of its industrial strategy and Technology 2023, according to the US Department of Education. Trade. His strategy also includes state support for entrepreneurs, strengthening intellectual property laws and major investments in STEM education and technology startups.
The department says that among Turkish manufacturing exports, 36% are medium-tech products and 3% are high-tech products. Turkey plans to increase the proportion of its exported medium-tech products to 44% and that of its high-tech products to 6% by the end of 2023.
On July 6, 2022, Lithuania displayed a Turkish-made and crowdfunded Bayraktar TB2 military combat drone, which it plans to send to Ukraine to help the war-torn country fight invasion Russian.
Petras Malukas | AFP | Getty Images
In recent years, Turkey has particularly distinguished itself in the field of defense technology. In 2022, Turkey reached a record $4.4 billion in arms exports – a figure higher than the annual defense budgets of some European countries. The country’s government aims to increase this figure to $6 billion in 2023.
The turnover of the country’s defense industry as a whole totaled $10 billion last year, according to Turkey’s Defense Industries Presidency, and the country is home to some 2,000 companies in the sector. Its locally manufactured Bayraktar TB2 drone became famous after it was used by Ukrainian forces against invading Russian troops.
Turkish media reports that Erdogan mentioned the drone’s success during his conversation with Musk, to which Musk responded that he was aware of the drone’s popularity internationally.
Turkish President Recep Tayyip Erdogan speaks during the launch of the medium-term program at the presidential complex in Ankara, Turkiye, September 6, 2023.
Anadolu Agency | Anadolu Agency | Getty Images
For the manufacturing sector as a whole, Turkey “is expected to invest between $1 billion and $1.5 billion per year to integrate Industry 4.0 solutions (referring to the fourth industrial revolution and digital transformation in manufacturing industries ) in the manufacturing process,” according to the U.S. Department of Commerce.
The Turkish economy, however, has been in a downward spiral for several years, with dwindling foreign exchange reserves and Erdogan’s persistent refusal to raise interest rates amid rapid growth resulting in a severely weakened currency and inflation. dizzying. The country’s central bank has made efforts in recent months to reverse the trend, gradually raising interest rates, although the value of the currency has not improved so far.
Turkey’s currency, the lira, is down 30% against the dollar since the start of the year and has lost 78% of its value against the greenback over the past five years. Erdogan’s efforts to increase foreign investment in the country – from conversations with CEOs like Musk to trade and investment deals with wealthy Gulf Arab states – appear to be part of an effort to resurrect finances of the country.