Elon Musk, CEO of Tesla and owner of X, arrives at the first AI Insight Forum at the Russell Building on Capitol Hill on Wednesday, September 13, 2023.

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Turkish President Recep Tayyip Erdogan has invited Elon Musk to build his next Tesla factory in Turkey, the country’s state media reported on 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.

“Erdogan recalled that Tesla entered the Turkish market with the launch of the Turkish electric car Togg in Türkiye and called on Tesla to build its seventh factory in Türkiye,” Turkish state news agency Anadolu reported, citing the country’s communications directorate.

Erdogan also offered opportunities to collaborate with Musk’s aerospace company SpaceX and the Turkish space program, inviting the billionaire inventor to Teknofest, Turkey’s largest aerospace and technology festival, taking place between late September and late October this year.

Musk responded that a number of Turkish suppliers are already working with Tesla and that Turkey is “among the main candidates” for its next factory, Anadolu wrote. CNBC has contacted Turkey’s Communications Directorate for full comment.

Aerial view of Tesla’s Shanghai Gigafactory on the outskirts of Shanghai, China, in July 2021.

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Tesla has six factories and is currently building a seventh in Mexico. In May, Musk said he would most likely decide on a location for a new factory by the end of the year. He has reportedly already spoken to Indian government officials about opening a low-cost electric vehicle manufacturing facility in India.

Tesla did not immediately respond to a CNBC request for comment. The company’s share price has risen 123% since the beginning of the year.

Erdogan and Musk also reportedly discussed collaborating on artificial intelligence and Starlink, SpaceX’s satellite internet service. Musk reportedly expressed interest in obtaining the necessary license from the Turkish government to operate Starlink in the country of 85 million people.

Manufacturing powerhouse

In recent decades, Turkey has positioned itself as an important manufacturing center at the interface between Europe and Asia.

Between 2012 and 2022, the share of manufacturing in Turkey’s GDP rose to about 19%, and the country aims to increase that share to 21% by the end of this year as part of its Industrial and Technology Strategy 2023, according to the US Department of Commerce . His strategy also includes government support for entrepreneurs, stricter intellectual property laws and major investments in STEM education and technology startups.

The ministry reports that 36% of Turkey’s manufacturing exports are medium-technology products and 3% are high-technology products. Turkey plans to increase the share of its exported medium-technology products to 44% and high-technology products to 6% by the end of 2023.

Lithuania exhibited a crowdfunded Turkish-made Bayraktar TB2 combat drone on July 6, 2022, which the country plans to send to Ukraine to help the war-torn country fight the Russian invasion.

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Turkish President Recep Tayyip Erdogan speaks during the launch of the medium-term program at the presidential complex in Ankara, Turkey, 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 annually to bring Industry 4.0 solutions (related to the fourth industrial revolution and digital transformation across all manufacturing industries) into the manufacturing process integrate,” says the US Department of Commerce.

However, Turkey’s economy has been in a downward spiral in recent years as shrinking foreign reserves and Erdogan’s continued refusal to raise interest rates in the face of rapid growth led to a severely weakened currency and soaring inflation. The country’s central bank has tried to reverse course in recent months, gradually raising interest rates, although the currency’s value has not improved so far.

Turkey’s currency, the lira, has fallen 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 push for more foreign investment in the country – from talks with CEOs like Musk to trade and investment deals with rich Arab Gulf states – appears to be part of an effort to revive the country’s finances.

Source : www.cnbc.com

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