Green Light to Collaborations in Electric Vehicles Market
Turkish Competition Board (“Board”) published its reasoned decision regarding Türkiye’nin Otomobili Girişim Grubu Sanayi ve Ticaret AŞ (“TOGG”)’s application to establish a hybrid after-sales service system for electric vehicles where TOGG planned to implement a hybrid after-sales service model in collaboration with the authorised chain services of Bosch Sanayi ve Ticaret A.Ş. (“Bosch”) for its electric passenger vehicles.
Likewise, Board evaluated the application for an individual exemption for the Agreement on Cooperation between Charging Network Operators” (“Charging Network Agreement”) signed between Trugo Akıllı Şarj Çözümleri Sanayi ve Ticaret AŞ (“Trugo”) and Shell&Turcas Petrol AŞ (“Shell”).
With the Board’s granting of individual exemption to TOGG’s Global Service Network Agreement and Authorized Chain Service Agreement with Bosch; and the granting of the same to the collaboration between Trugo and Shell, it can be clearly seen that the Board has taken steps to contribute to the development of the electric vehicles market, and paves the way for the expansion of the future collaborations in the said market.
Board’s Evaluation of the collaboration between TOGG and Bosch
Global Service Network Agreement and Authorised Chain Service Agreement between TOGG and Bosch were assessed under the individual exemption conditions stipulated in Art. 5 of the Law No. 4054 and it was decided that such collaboration met the conditions for an individual exemption.
- Economic or Technical Development: The agreement aims to establish a widespread maintenance and repair network for TOGG’s electric vehicles, combining Bosch’s expertise with TOGG’s technological infrastructure to provide consumers with high-quality, cost-effective services. This collaboration is expected to promote the adoption of electric vehicles with lower carbon footprints.
- Consumer Benefit: Bosch’s extensive service network will enhance TOGG users’ access to after-sales services, potentially leading to lower prices and improved service quality.
- No Elimination of Competition in a Significant Part of the Market: Given TOGG’s low market share and limited number of service centers, the arrangement is unlikely to eliminate competition. Furthermore, the agreements do not contain exclusivity clauses and they allow Bosch’s service centers to serve other brands.
- No Excessive Restriction on Competition: Short termination notice periods support flexibility for service providers dissatisfied with the collaboration to work with other suppliers, thus promoting alternatives in the market. Additionally, TOGG’s pricing for service fees is suggested as recommended retail prices, allowing lower-price applications that do not restrict competition.
Board’s Evaluation of the Charging Network Agreement between Shell and Trugo
The transaction subject to the individual exemption includes the Charging Network Agreement signed between Shell and Trugo, whereby Shell and Trugo will separately establish and operate electric vehicle charging stations at Shell-branded fuel stations by sharing the costs, and at the same time, the parties will offer services to customers using each other’s electric vehicle charging services through their respective platforms.
Charging Network Agreement was assessed under the individual exemption conditions stipulated in Art. 5 of the Law No: 4054. The evaluation considered the following four key criteria as follows:
- Economic or Technical Development: Charging Network Agreement supports the widespread adoption of electric vehicles, which in turn contributes to the fight against climate change and the reduction of Türkiye’s carbon footprint. This agreement will play a role in increasing the use of electric vehicles with lower carbon emissions, while also ensuring the establishment of the infrastructure needed for a transition to clean energy.
- Consumer Benefit: Through this cooperation, the parties are expected to share the investment risks while leveraging each other’s technical expertise, know-how, and dealer networks. By doing so, they will promote cost efficiency, which can then be passed on to consumers through lower prices and enhanced service quality.
- No Elimination of Competition in a Significant Part of the Market: The cooperation will have a limited impact on the market in its current state, considering the following: The presence of enterprises with a high market share already operating in the relevant market, the increasing number of enterprises obtaining licenses in the market, the market’s openness to development and potential entries, the high number of fuel distribution companies required for the operation of electric charging stations, and the fact that electric charging stations can be established in various locations such as rest areas, shopping mall parking lots, and similar facilities, in addition to fuel stations.
No Excessive Restriction on Competition: It is evaluated by the Board that the restrictions introduced and included in the Charging Network Agreement are reasonable in order for the parties to receive a return on their investments; and do not restrict competition more than necessary.
