Togg’s path to growth, its financial landscape
A car assembly line at a factory of Togg at the Gemlik Togg Technology Campus, Bursa, northwestern Türkiye, May 17, 2024. (AFP Photo)
Togg, an acronym for “Türkiye’s Automobile Joint Venture Group,” is the country’s first domestically developed electric vehicle (EV) brand. Established as a consortium of major Turkish companies, Togg aims to position Türkiye as a competitive player in the global EV market by producing smart, sustainable, and high-tech automobiles.
While still in its very early years, the company has attracted significant investment and is expanding its production capacity to meet growing demand. Recently, concerns have emerged regarding Togg’s financial performance, with reports suggesting that the company recorded approximately $200 million in losses in 2024. This figure has fueled speculation about whether Türkiye’s first domestically developed electric vehicle (EV) brand is in trouble. However, looking at the broader EV industry, such financial figures are neither unexpected nor necessarily an indicator of failure.
A comparative analysis with other automakers helps put these concerns into perspective. Ford’s EV division, for example, reported a $5.1 billion loss while selling around 105,000 vehicles. Lucid, a premium EV manufacturer, lost $2.9 billion despite selling only 10,241 cars. Xiaomi, a new entrant in the market, recorded a $1 billion loss after selling over 135,000 units. Togg’s estimated per-vehicle loss of approximately $7,000 is relatively moderate for an emerging company that is still scaling operations, launching new models, and investing in production capacity.
It is important to recognize that financial losses in the early years are not unique to Togg; they are a natural part of any new automaker’s growth cycle. EV production requires massive upfront investment, especially in manufacturing facilities, supply chain development, and R&D. Even Tesla, which is now the world’s most valuable car company, spent years in financial distress before turning profitable. In this sense, Togg’s financial position is not unusual, but in line with the standard trajectory of EV companies.
More importantly, Togg is not merely focused on short-term vehicle sales. It is positioning itself for long-term sustainability. The company is actively expanding its model lineup, increasing factory utilization, and establishing its own battery production facility. These strategic moves will play a critical role in reducing long-term costs, improving efficiency, and strengthening its competitive advantage.
Rather than interpreting its financial performance as a sign of failure, it should be understood as an investment phase that will ultimately contribute to future profitability.
Navigating competition, future challenges
Despite Togg’s promising trajectory, challenges remain—particularly in the face of increasing competition. The global EV market is developing rapidly, and affordability is becoming a key battleground. Tesla and European automakers are preparing to launch new budget-friendly EVs priced below €30,000, which could significantly shift consumer preferences. This puts pressure on Togg to develop lower-cost models while maintaining quality and technological competitiveness.
Scaling up production and achieving economies of scale will be essential for Togg’s success. At present, the company’s production capacity is growing, but reaching profitability will depend on increasing volume.
A crucial step in this process is the expansion of its vehicle lineup beyond mid-range and premium models to include more affordable alternatives. If Togg can successfully introduce lower-cost EVs, it will strengthen its market position and reach a broader segment of consumers.
One major opportunity for Togg lies in Türkiye’s urban transportation sector. If major taxi fleets in cities like Istanbul and Ankara transition to Togg sedans, the company could achieve a substantial boost in sales. Such a shift would not only support Togg’s business goals but also contribute to Türkiye’s transition toward sustainable mobility. Encouraging the adoption of domestically produced EVs in public transportation could also help mitigate the impact of foreign competition on the budget EV segment.
Another significant factor in Togg’s long-term success is its investment in battery technology. The company is in the process of establishing its own battery production facility, which is a strategic move that will provide greater supply chain stability and cost control. Battery production is one of the most expensive aspects of EV manufacturing and having in-house capabilities will allow Togg to remain competitive as the industry advances.
While Togg faces strong competition from established players, it has several advantages that can work in its favor. Türkiye’s EV infrastructure is improving, with an increasing number of charging stations and supportive government policies.
Additionally, as more consumers become aware of the benefits of EVs, the demand for electric cars is expected to rise. If Togg can align its production and pricing strategy with market needs, it has the potential to carve out a strong position in both the domestic and regional markets.
Looking ahead: Road to profitability
Togg is still in its early years, and like most automotive startups, financial challenges are to be expected. However, interpreting short-term losses as an indicator of failure overlooks the bigger picture. The company is in a phase of investment and expansion, similar to how Tesla, Nio, and other EV manufacturers struggled before reaching profitability.
The key takeaway is that Togg’s current financial state is not in crisis but in a standard phase of building a competitive EV company. Instead of focusing solely on loss figures, discussions should center on the company’s long-term strategy, competitive outlook, and market expansion. The combination of increased production, battery independence, and potential growth in urban transportation could provide a strong foundation for financial sustainability.
Türkiye’s push into the EV sector is more than just about Togg. It represents a broader ambition to become a key player in the global electric mobility landscape. If Togg continues on its current trajectory, refines its competitive strategy, and adapts to market shifts, it could emerge as a significant name in the international automotive industry.
Rather than being a brand at risk, Togg is a company in motion, navigating the same challenges that every successful EV manufacturer has faced. With time, strategic investments, and market adaptation, it has the potential to transition from a growing startup to an established automaker, contributing to Türkiye’s broader economic and technological progress.
About the author: Muruvvet Sunhiran writes about financial and international issues.
